As per case facts, the Petitioner, Vedanta Limited, made significant investments in establishing an aluminium manufacturing plant in Odisha, relying on assurances from the State Government and Odisha Mining Corporation ...
W.P.(C) No.9617 of 2023 Page 1 of 92
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.9617 of 2023
CNR No. ODHC010235162023
In the matter of an Application under
Articles 226 and 227 of the Constitution of India, 1950
***
Vedanta Limited
through its
General Counsel (Aluminium & Power)
a Public Limited Company
Incorporated and registered
Under the provisions of
The Companies Act, 1956
And
Having its
Registered Office at 1
st Floor, ‗C‘ Wing
Unit 103, Corporate Avenue
Atul Projects Chakala, Andheri (East)
Mumbai – 400 093
And
Having its Alumina Refinery Plant
At/P.O.: Lanjigarh,
District: Kalahandi – 766 027, Odisha
Represented through its
General Counsel,
Aluminium and Power,
Shri Nabal K. Sharma. … Petitioner
-VERSUS-
1. Odisha Mining Corporation Ltd.
represented through its WP(C)/9617/2023
ODHC010235162023
2026:OHC:168-DB
W.P.(C) No.9617 of 2023 Page 2 of 92
Chief General Manager,
Having its
Registered Office
At: OMC House
Bhubaneswar – 751 001
Odisha.
2. Department of Steel and Mines,
Government of Odisha,
Represented through its
Secretary
Having its Office at Sachivalaya Marg,
Unit-2, Keshari Nagar,
Bhubaneswar – 751 001, Odisha.
3. Union of India,
Represented through
Secretary, Ministry of Mines,
Government of India,
Shastri Bhawan,
New Delhi – 110 001. … Opposite parties.
Counsel appeared for the parties:
For the Petitioner : Mr. Vikas Singh,
Senior Advocate
along with
Mr. Dhrub Mehta, Senior Advocate
Assisted by
Ms. Deepika,
Mr. Prashanta Kumar Nayak and
Mr. Shibashis Mishra, Advocates.
For the Opposite Party : Mr. Raj Kumar Mehta,
No.1 Senior Advocate assisted by
M/s. Pravat Kumar Muduli and
W.P.(C) No.9617 of 2023 Page 3 of 92
Himanshi Andley and
Chandan Kumar Rout, Advocates
For the Opposite Party : Mr. Pitambar Acharya,
No.2 Advocate General
along with
Mr. Saswat Das,
Additional Government Advocate
For the Opposite Party : Mr. Prasanna Kumar Parhi,
No.3 Deputy Solicitor General of India
P R E S E N T:
HONOURABLE CHIEF JUSTICE
MR. HARISH TANDON
AND
HONOURABLE JUSTICE
MR. MURAHARI SRI RAMAN
Date of Hearing : 25.08.2026 :: Date of Judgment : 01.10.2026
JUDGMENT
The petitioner, with a hope to resurrect the terms of
agreement dated 05.10.2004 for supply of bauxite
invoked doctrine of promissory estoppel has filed this
writ petition under Articles 226 and 227 of the
Constitution of India for grant of following relief(s):
“In view of the above facts and circumstances as well as
the legal submissions, the Petitioner prays that this
Hon‟ble Court may be pleased to:
(a) Admit the present writ application; and
W.P.(C) No.9617 of 2023 Page 4 of 92
(a)[i] Notwithstanding any prayer already made in the
Writ petition, issue an appropriate writ, order or
direction to the Odisha Mining Corporation Limited
and Government of Odisha to provide minimum 150
Million Tonnes Bauxite at a price spelt out in the
agreement of 2004 and 2009 read with the
Memorandums of Understanding dated 07.06.2003
and 04.04.2007. The supplies of approx. 20 Million
Tonnes of Bauxite already made to the petitioner
since 2018 be deducted from the said 150 Millions
Tonnes Bauxite; and
(a)[ii] Notwithstanding any prayer already made in the
Notwithstanding any prayer already made in the
Writ petition, issue an appropriate writ order or
direction commanding the State of Odisha to adjust
the supplies made so far of Bauxite at the rates
specified in the Agreement of 2004 and the surplus
amount coming into the hands of the Odisha Mining
Corporation Limited on that basis be utilised for
further supply of Bauxite.
(b) Take on record the Affidavits dated 30.08.2021 and
07.01.2022 filed by the Ministry of Mines,
Government of India in Bharat Aluminium Co. Ltd.
Vs. Odisha Mining Corporation Ltd. and Ors., W.P.(C)
9358 of 2021, and pursuant to the clarifications
issued by the Central Government on the role and
applicability of Rule 45(1), the Minerals (Other than
Atomic and Hydro Carbons Energy Minerals)
Concession Rules, 2016 in the aforementioned two
Affidavits, declare that the amended Rule 45(1) does
not apply to e-auctions of Bauxite for determining the
floor price of the auction; and
W.P.(C) No.9617 of 2023 Page 5 of 92
(c) Declare that in public interest, the floor price of the e-
auction for mercantile sale of bauxite through
auction and Long Term Linkage process carried out
by the Opposite Party No.1 is to be determined by
calculating the cost of production plus margin of
profit of 50% under the previous Policy dated
24.02.2018, which is also contemplated in clause 4
of the Sales agreement dated 20.04.2018 between
Odisha Mining Corporation Limited and Vedanta
Ltd. and which has yielded three successful
auctions; and
(d) Direct the opposite parties to determine the weighted
average price from e-auctions of Bauxite by
determining the floor price of e auction at the cost of
production plus margin of profit of 50% as
contemplated in clause 4 of the Sales Agreement
dated 20.04.2018 read with the Long Term Linkage
Policy dated 24.02.2018 as amended on
10.07.2019; and
(e) Quash the Letter (Bearing Ref. No.4200/OMC/
S&M/2023) dated 16.03.2023 titled “Disposal of
representation dated 08.02.2023 and dated
13.03.2023 in compliance of the Order dated
25.01.2023 passed in W.P.(C) No. 10280 of 2021”
issued by the opposite party No.1 and any other
documents/communications stating that Rule 45(1),
the Minerals (Other than Atomic and Hydro Carbons
Energy Minerals) Concession Rules, 2016 is
applicable and legally justified for calculating the
price of Bauxite during commercial sale(s) as
arbitrary, unreasonable, violative of Article 14 of the
Constitution of India, and ultra vires Section 13 of
W.P.(C) No.9617 of 2023 Page 6 of 92
the Mines and Minerals (Development and
Regulation) Act, 1957; and
(f) Quash any demand notices which the Odisha
Mining Corporation Limited may issue to the
Petitioner, consequent to issuance of Letter (Bearing
Ref. No. 4200/OMC/S&M/2023) dated 16.03.2023
titled “Disposal of representation dated 08.02.2023
and dated 13.03.2023 in compliance of the Order
dated 25.01.2023 passed in W.P.(C) No. 10280 of
2021.”, as well as on the basis of the reasoning
accorded in the Letter, of using Rule 45(1), the
Minerals (Other than Atomic and Hydro Carbons
Energy Minerals) Concession Rules, 2016 and
thereby dismissing the representations of the
Petitioner; and
(g) Declare Clause D(e) of the Notification (Bearing Ref.
No. 7865) dated 16.08.2022 issued by the
Department of Steel & Mines, Government of Odisha,
titled “Long Term Linkage (LTL) Policy of Minerals for
Odisha Based Industries Through Odisha Mining
Corporation Limited (OMC)— 2022” (“the 2022 LTL
Policy”), to the extent that it directs that “Floor price
for the National e-auction may be fixed as per Rule
45 of the Minerals (Other than Atomic and Hydro
Carbons Energy Minerals) Concession Rules, 2016
as amended from time to time” as arbitrary, violative
of Article 14 of the Constitution of India, and ultra
vires Section 13 of the Mines and Minerals
(Development and Regulation) Act, 1957; and
(h) Declare that in case of Long Term Linkage sale, the
weighted average price of charged to the Long Term
Linkage Consumer under commercial sale of Bauxite
will always be the last discovered price which is the
W.P.(C) No.9617 of 2023 Page 7 of 92
price arrived at pursuant to a successfully held
auction sale of Bauxite under the 2022 Long Term
Linkage Policy. Consequently, direct opposite party
No.2 to make necessary modifications in Clause D of
the 2022 Long Term Linkage policy, in specific, cl.
D(c) which states that the “Weighted average price
derived from the National e-auction shall be the long-
term linkage price for the relevant grades of Bauxite
ore”; and
(i) Direct consequential refunds of all amounts collected
by the opposite party 1 on account of illegal
application of Rule 45(1), the Minerals (Other than
Atomic and Hydro Carbons Energy Minerals)
Concession Rules, 2016 to the Floor Price
calculations of the National e-auctions of bauxite;
and
(j) Quash the demand notices raised by the Odisha
Mining Corporation Ltd. on the basis of Floor Price
fixed using Rule 45(1), the Minerals (Other than
Atomic and Hydro Carbons Energy Minerals)
Concession Rules, 2016 to the extent that they
demand excess amounts on account of the
applicability of amended Rule 45(1) to e-auction of
bauxite; and/or
(k) Pass an appropriate writ, order or direction
prohibiting the opposite party Nos.1 and 2 from
applying the amended Rule 45(1), the Minerals
(Other than Atomic and Hydro Carbons Energy
Minerals) Concession Rules, 2016 to determine
reserve price in the auction process for mercantile
sale of bauxite; or
W.P.(C) No.9617 of 2023 Page 8 of 92
(l) In the alternative and without prejudice to other
prayers, declare that the amended Rule 45(1), the
Minerals (Other than Atomic and Hydro Carbons
Energy Minerals) Concession Rules, 2016 is violative
of Section 13 of the Mines and Minerals
(Development and Regulation) Act, 1957; or
(m) In the alternative and without prejudice to other
prayers, read down amended Rule 45 (1), the
Minerals (Other than Atomic and Hydro Carbons
Energy Minerals) Concession Rules, 2016 as
amended being de hors Section 13 of the Mines and
Minerals (Development and Regulation) Act, 1957
and if applied, to declare that Section 13 stands
violative of the Constitution of India, 1950; or
(n) In the alternative and without prejudice to other
prayers, quash the Notification Nos. G.S.R. 674 (E)
and 675 (E) dated 20.09.2019 issued by OP.3
amending Rule 45(1), the Minerals (Other than
Atomic and Hydro Carbons Energy Minerals)
Concession Rules, 2016 as ultra vires Section 13 of
the Mines and Minerals (Development and
Regulation) Act, 1957 and violative of Articles 14, 19
and 300A of the Constitution of India; and/or
(o) Pass such other or further order as this Hon‟ble
Court may deem fit and proper in the facts and
circumstances of the case.”
1.1. Though many prayers are made in the writ petition as
reproduced hereinbefore, the petitioner at the time of
hearing of the present matter confined arguments to
―promissory estoppel‖ in order to press for enforcement
of the terms of Agreement dated 05.10.2004.
W.P.(C) No.9617 of 2023 Page 9 of 92
Facts:
2. Facts adumbrated by the petitioner giving rise to filing of
this writ petition are narrated herein below.
2.1. The present writ petition arises out of a dispute between
the petitioner, Vedanta Ltd., and the Odisha Mining
Corporation Ltd. (―OMC‖, for brevity), concerning the
supply and pricing of bauxite for the petitioner‘s alumina
refinery and allied aluminium operations in the State of
Odisha. The petitioner is a large industrial undertaking
engaged in the business of manufacturing aluminium
products and operates an alumina refinery at Lanjigarh,
as well as an aluminium smelter and captive power
plants at Jharsuguda. The petitioner asserts that it has
claimed to have made substantial investments in Odisha
over the years and that its industrial establishment was
made on the basis of assurance of long term bauxite
availability and stable pricing structure.
2.2. The petitioner‘s claim is founded on a series of policy
commitment and contractual arrangement entered into
with the State of Odisha and the OMC. On 07.06.2003, a
Memorandum of Understanding was executed between
the Government of Odisha and the petitioner‘s
predecessor, viz., Sterlite Industries India Ltd., for
setting up an alumina refinery complex at Lanjigarh.
Thereafter, on 05.10.2004, an agreement was entered
W.P.(C) No.9617 of 2023 Page 10 of 92
into between the OMC and the petitioner, under which
the State Government undertook to supply 150 million
tonnes of bauxite for the petitioner‘s refinery, and the
pricing mechanism was linked to a formula of cost of
production plus 50% royalty for bauxite converted into
aluminium within the State. The petitioner claims that,
relying on the assurance of the State Government as to
both the quantity and the pricing of raw material, it
invested approximately Rs.1,00,000 crores in Odisha
over two decades and developed major industrial
facilities that support large-scale direct and indirect
employment.
2.3. In 2014, the Long Term Linkage Policy (―LTL Policy‖, for
convenience) was introduced to provide a mechanism for
the supply of minerals, and by Notification, dated
24.02.2018, bauxite was expressly brought within its
ambit. Under the Policy of 2018 the State Government
provided for a structured regime under which 70% of
saleable stock was to be allotted as LTL to the end-user
industries, while 30% was to be disposed of through
national e-auction. For the e-auction component, the
floor price was to be fixed at the cost of production plus
50% profit margin, and this policy created certainty in
both the quantity and the pricing. In pursuance of the
Policy of 2018, the petitioner-company and the OMC
executed a sale agreement on 20.04.2018 for LTL supply
W.P.(C) No.9617 of 2023 Page 11 of 92
of bauxite and the price payable for the LTL quantity
was to be derived from the weighted average price
discovered in the national e-auction of bauxite. This
regime functioned successfully for some time, and that
three e-auctions held between April, 2018 and April,
2019 were successful. Nonetheless, the situation got
changed in 2019 and post-thereof. The OMC abruptly
discontinued the national e-auction process for bauxite
in 2019 and later altered the pricing mechanism for LTL
supplies. According to the petitioner, this change was
introduced midstream while the contractual
arrangement between the parties was still in force. Thus,
this caused grave prejudice to the petitioner‘s industrial
operations.
2.4. Complication arose after the Rule 45 of the Minerals
(Other than Atomic and Hydro Carbons Energy Minerals)
Concession Rules, 2016 got amended by virtue of the
Minerals (Other than Atomic and Hydro Carbons Energy
Minerals) Concession (Amendment) Rules, 2019 vide
G.S.R. 674(E), dated 20.09.2019 . The petitioner‘s
grievance is that the OMC began to rely on Rule 45 as
amended for determining the floor price of bauxite sold
through national e-auction. According to the petitioner,
Rule 45 applies to mine-block auctions and not to the
mercantile sale of bauxite by the OMC under the LTL
arrangement. The petitioner relies on the stand of the
W.P.(C) No.9617 of 2023 Page 12 of 92
Central Government that mine-block auctions and
commercial sale of minerals are distinct activities, and
that Rule 45 is intended for use in the context of mine-
block auctions.
2.5. On 19.08.2020, the Government of Odisha directed the
OMC to implement the mechanism provided under the
amendment to Rule 45 for determination of pricing of
bauxite in the national e-auction process. This direction
materially altered the pre-existing contractual and policy
regime and resulted in an enhanced floor price, thereby
burdening the petitioner with a substantially higher cost
of the raw material. This, according to the petitioner, not
only increased its financial burden but also placed it at a
disadvantageous position compared with other similarly
situated end-user industries. The altered methodology
has disrupted the balance of the LTL arrangement and
rendered its operations financially unviable.
2.6. The petitioner had earlier approached this Court in
W.P.(C) No.22397 of 2020 and thereafter in W.P.(C)
No.10280 of 2021, challenging the imposition of the
revised pricing formula and sought for interim relief(s).
In the proceedings that culminated in the order dated
25.01.2023, the parties agreed that the petitioner would
submit a comprehensive representation before the OMC,
which would be considered by passing a reasoned and
speaking order after granting opportunity of hearing. The
W.P.(C) No.9617 of 2023 Page 13 of 92
Court also continued the interim arrangement for a
limited period.
2.7. In obedience to said order, the petitioner submitted a
detailed representation on 08.02.2023, followed by an
additional representation on 13.03.2023, wherein and
whereby the petitioner set out the historical basis of the
bauxite linkage, the investment commitments made by
relying upon the assurance given by the Government,
the functioning of the Policy of 2018 and it raised
grievance that the change in pricing methodology had
been introduced without legal justification. The
petitioner requested the OMC to revert to the earlier
formula of cost of production plus 50% profit for
determining the floor price of bauxite and to apply the
same formula for pending and future dues inasmuch as
the revised pricing method was onerous and unfair.
2.8. Having thus afforded opportunity to the petitioner on
22.03.2023 pursuant to notice issued on 21.03.2023,
the OMC passed order dated 16.03.2023 rejecting the
petitioner‘s request and held that it was not possible to
accept the demand for fixation of the price of bauxite ore
at the cost of production plus 50% profit for the supplies
already made from September 2020 to February 2023
and up to 19.04.2023. It is further opined that the LTL
sales agreement did not contain any provision for
calculation of floor price applicable to the national e-
W.P.(C) No.9617 of 2023 Page 14 of 92
auction, and that the sale agreement had to be read in
conformity with the Rules, and that the Government of
India had not clarified that Rule 45 was inapplicable to
commercial sale of bauxite. The reason of the OMC is
that pricing mechanism adopted for various e-auctions
had been based on directions received from the
Government of Odisha from time to time and that the
price of Rs.1,000 per metric tonne was only an interim
arrangement and the petitioner could not be extended
any special treatment. Such decision of OMC has been
attacked as inconsistent with the earlier policy
framework and the contractual arrangement.
2.9. Assailing the Order dated 16.03.2023, the petitioner has
come up before this Court by way of filing the present
writ petition by contending that unless the interim
protection is continued, it would be deprived of access to
bauxite from the OMC stockyard and would suffer
serious prejudice affecting its ongoing operations and
expansion plans.
At the stage of fresh admission:
3. This Court at the stage of entertainment of the writ
petition, while issuing notice to the opposite parties,
passed the following interim order on 29.03.2023:
“This application has been filed by the petitioner for
grant of interim protection.
W.P.(C) No.9617 of 2023 Page 15 of 92
2. Mr. D. Mehta, learned Senior Counsel appearing for
the petitioner contended that earlier the petitioner
had approached this Court by filing W.P.(C) No.
10280 of 2021, which was disposed of vide order
dated 25.01.2023
1 directing the authority to
consider the grievance of the petitioner, but the same
was rejected. It is further contended that in the said
writ petition, this Court, vide interim order dated
06.04.2022 passed in I.A. No.2662 of 2021
permitted the petitioner to lift the agreed quantity of
Bauxite for the remaining period of the financial year
2022-23 subject to payment of Rs.1,000/- per MT
which price will be exclusive of royalty, DMF &
NMET, GST, weighment and sampling analysis
charges, which will be charged extra, upon the
1
A common order dated 25.01.2023 in W.P.(C) No.10280 of 2021 (Vedanta
Limited Vrs. Odisha Mining Corporation Limited) and W.P.(C) No.9358 of
2021 (Bharat Aluminium Co. Ltd.) was passed which is reproduced as
follows:
“3. Both the above noted writ petitions have been filed challenging the
vires of the provisions contained under Rule 45(1) of the Minerals
(Other than Atomic and Hydro Carbons Energy Minerals)
Concession Rules, 2016, as amended on 20th September, 2019. It
is contended that the petitioners are not liable to pay the dues, as
demanded by the authority concerned.
***
6. The above noted suggestion of Mr. Ashok Parija, learned Sr.
Counsel appearing along with Mr. P.K. Muduli, learned counsel for
opposite party no.1-OMC, on being confronted to, was agreed upon
by Mr. Dhrub Mehta, learned Senior Counsel appearing along with
Mr. P.K. Nayak, learned counsel for the petitioners. Therefore, as
agreed to by learned counsel for the parties, without
expressing any opinion on the merits of the case, these writ
petitions are disposed of permitting the petitioners to file their
respective comprehensive representations agitating all their
grievances, besides what have been raised in these present writ
petitions before the opposite party no.1-Odisha Mining Corporation
within two weeks from today. In the event such representations
are filed, opposite party no.1 shall consider the same and pass a
reasoned and speaking order by giving opportunity of hearing to
the petitioners, as expeditiously as possible, preferably within a
period of four weeks from the date of receipt of such
representations along with the certified copy of this order.
Needless to say, the interim order dated 07.04.2021 shall
continue for a period of six weeks, i.e., till disposal of the
representations of the petitioners.”
W.P.(C) No.9617 of 2023 Page 16 of 92
petitioner furnishing an undertaking, similar to
Annexure-A-1 to I.A. No.5392 of 2021 for the
differential amount, with the floor price arrived at by
the OMC under Rule 45 of the Minerals (Other than
Atomic and Hydro Carbon Energy Minerals)
Concession Rules, 2016 as amended subject to the
final outcome of the writ petition. Therefore, it is
contended that since the agreement is valid till 19
th
April 2023, this may continue till that period.
3. In view of interim order dated 06.04.2022 passed in
I.A. No.2662 of 2021 arising out of W.P.(C) No.10280
of 2021, as an interim measure, this Court permits
the petitioner to lift the agreed quantity of Bauxite for
the remaining period of the financial year 2022-23
subject to payment of Rs.1,000/- per MT which price
will be exclusive of royalty, DMF & NMET, GST,
weighment and sampling analysis charges, which
will be charged extra, upon the petitioner furnishing
an undertaking, for the differential amount, with the
floor price arrived at by the OMC under Rule 45 of
the Minerals (Other than Atomic and Hydro Carbon
Energy Minerals) Concession Rules, 2016, as
amended, subject to the final outcome of the writ
petition. It is made clear that the agreement, which
is valid till 19
th April 2023, shall continue till that
period subject to extension granted by the
Government on the application of the petitioner.
4. Issue urgent certified copy as per rules.”
Counter affidavit of the opposite party No.1:
4. A counter affidavit being sworn to by the Advisor (legal),
Odisha Mining Corporation Limited, OMC House,
W.P.(C) No.9617 of 2023 Page 17 of 92
Bhubaneswar has come to be filed on 21
st June, 2023
inter alia with the following response:
(i) The order dated 16.03.2023 rejecting the petitioner‘s
representation is legal, valid, reasoned and passed
strictly in accordance with law after granting due
opportunity of hearing pursuant to the directions of
this Court.
(ii) It is the specific stand that Rule 45(1) of the
Minerals (Other than Atomic and Hydro Carbons
Energy Minerals) Concession Rules, 2016 (for
convenience be referred to as ―MC Rules‖) , as
substituted by Notification G.S.R. No. 674(E) dated
20.09.2019, provides for the statutory mechanism
for determination of the Average Sale Price of
metallurgical grade bauxite. The said provision is
not confined to mining lease auctions but is equally
applicable for determination of the floor price for
commercial sale of bauxite through National e-
Auction. Neither the MMDR Act, 1957 nor the Rules
framed thereunder prohibit application of Rule 45(1)
for commercial sale of bauxite and, till date, the
Government of India has never issued any
clarification excluding such applicability.
(iii) The Long Term Linkage (LTL) Sales Agreement dated
20.04.2018 executed between the parties does not
W.P.(C) No.9617 of 2023 Page 18 of 92
contain any independent formula or mechanism for
fixation of the floor price of bauxite. Consequently,
the agreement has to be read analogous with the
statutory Rules governing the field, as amended from
time to time. Since the statutory Rules prevail over
the contractual terms, the floor price adopted by the
opposite party No.1 in accordance with Rule 45(1)
and the clarification issued by the Government of
Odisha vide letter dated 19.08.2020 cannot be said
to be arbitrary or contrary to the agreement.
(iv) The Government of Odisha, by letter dated
19.08.2020, specifically directed OMC to conduct
National e-Auctions by calculating the Average Sale
Price in accordance with amended Rule 45(1).
Accordingly, all subsequent National e-Auctions
were conducted following the statutory formula. No
specific sale price being guaranteed under the LTL
Agreement, the petitioner‘s claim to adopt particular
methodology for fixation of floor price is
misconceived.
(v) The original LTL Policy dated 17.09.2014 stood
superseded by the LTL Policy, 2022 with effect from
16.08.2022. Clause D(e) of the new policy expressly
provides that the floor price for National e-Auction
shall be fixed in accordance with Rule 45 of the MC
Rules, 2016, as amended from time to time, or in
W.P.(C) No.9617 of 2023 Page 19 of 92
terms of any notification issued by the State
Government. Therefore, after the LTL Policy, 2022,
came into force the earlier policy ceased to operate
and the new policy became binding on the parties.
(vi) The LTL Sales Agreement dated 20.04.2018 expired
by efflux of time on 19.04.2023 and a fresh LTL
Sales Agreement was executed between the parties
on 16.05.2023 under the LTL Policy, 2022.
Consequently, the rights and obligations of the
parties are now governed by the fresh agreement
read with the LTL Policy, 2022 and the applicable
statutory provisions.
(vii) While disposing of earlier proceeding in W.P.(C)
No.10280 of 2021 by Order dated 25.01.2023 the
petitioner was permitted to submit a comprehensive
representation. The petitioner, availing such
opportunity, was heard and on consideration of all
submissions made by the petitioner, its
representations dated 08.02.2023 and 13.03.2023, a
detailed speaking order dated 16.03.2023 was
passed whereby the said representations stood
rejected. Every contention raised by the petitioner,
including the challenge to the applicability of Rule
45(1), as amended, for determining the fixation of
floor price, feasibility of previous LTL Policy,
Government communications and legal opinions,
W.P.(C) No.9617 of 2023 Page 20 of 92
were duly considered before arriving at the
impugned decision.
(viii) The Union of India in its earlier counter affidavit
filed in W.P.(C) No.10280 of 2021, wherein it was
stated that the MMDR Act and the Rules do not
either prescribe or prohibit adoption of the Average
Sale Price formula under Rule 45(1) for fixation of
the floor price of bauxite and that the methodology
for determining such floor price is within the domain
of the OMC.
(ix) The OMC, being a wholly owned Government of
Odisha undertaking, is bound to implement the
policies and directions issued by the State
Government. In absence of any statutory prohibition
against applying Rule 45(1) for commercial sale of
bauxite, the OMC is obligated to adopt the statutory
formula while conducting National e-Auctions and
fixing the floor price.
4.1. On the aforesaid premises, there being no arbitrariness,
illegality or violation of neither constitutional provisions
nor does the adoption of method to fix sale price in tune
with MC Rules as amended affect contractual right of the
petitioner, the writ petition, being devoid of merit,
deserves to be dismissed.
Rejoinder affidavit of the petitioner:
W.P.(C) No.9617 of 2023 Page 21 of 92
5. Opposing the response of the opposite parties, the
petitioner filed a rejoinder affidavit traversing the
averments made in the counter affidavit. The action of
the opposite parties whittled down the legitimate
expectations arising out of the LTL arrangement and
such action is inconsistent with the rights and
obligations flowing from the agreement executed between
the parties.
5.1. Reiterating that the impugned demand raised by
adopting the pricing mechanism lacked statutory and
contractual sanction, the petitioner fervently requests
the impugned order to be set aside.
Response of the opposite party No.1:
6. In reply to the rejoinder affidavit filed by the petitioner,
the opposite parties reiterated and reaffirmed the stand
taken in the counter affidavit and denied each of the
averments made in the rejoinder, save and except those
specifically admitted.
6.1. The actions impugned by the petitioner were taken
strictly in accordance with the provisions of the relevant
statutes, the applicable rules and regulations, the LTL
Policy, and the terms and conditions of the LTL Sales
Agreement executed between the parties. Every decision
taken by the authorities was supported by the applicable
legal framework and was neither arbitrary nor
W.P.(C) No.9617 of 2023 Page 22 of 92
unreasonable. The petitioner had failed to establish any
violation of statutory provisions, contractual obligations,
or principles of natural justice.
6.2. The opposite parties maintained that the petitioner had
sought to place an erroneous interpretation upon the
contractual terms and obligations envisaged under the
statutory provisions. The petitioner seeks to overlook the
legal framework governing the fixation of price and
supply of bauxite.
6.3. The rejoinder fails to dislodge the factual position
established in the counter affidavit and does not rebut
the documentary materials relied upon by the opposite
parties. The petitioner has merely reiterated allegations
already dealt with in the counter affidavit without
producing any cogent material to substantiate its claims
or to demonstrate that the impugned actions suffer from
illegality, arbitrariness, or procedural impropriety.
6.4. Reiterating that the counter affidavit fully answers the
contentions raised by the petitioner and that the
rejoinder does not make out any case for interference
under Article 226 of the Constitution of India, the
opposite parties prayed that the writ petition, being
devoid of merit, be dismissed.
Counter Affidavit of the opposite party No.2:
W.P.(C) No.9617 of 2023 Page 23 of 92
7. An affidavit being sworn to by the Additional Secretary to
Government, Department of Steel and Mines,
Government of Odisha, the opposite party No.2 has
come to be filed on 17.03.2025 controverting the
averments made in the writ petition and supporting the
stand taken by the opposite parties. The policy decisions
relating to the supply, pricing, and allocation of bauxite
were taken after due consideration of the statutory
framework and the prevailing requirement under law
and that the same cannot be alleged to be neither
arbitrary nor contrary to law. The existing policy and the
relevant statutory provisions authorise the competent
authorities to adopt the impugned pricing mechanism
and to regulate the sale and supply of mineral, i.e.,
bauxite, in the manner prescribed.
7.1. The contractual obligations cannot override or dilute the
operation of the governing statutory provisions and
policy decisions stemming on the principles of legitimate
expectation. The contractual relationship between the
parties is to be glossed subject to the statutory
framework in force from time to time and any
subsequent amendment to the policy would necessarily
regulate the rights and obligations arising under the
agreement. The petitioner is not entitled to seek
enforcement of contractual terms in a manner
inconsistent with the applicable statutory provisions.
W.P.(C) No.9617 of 2023 Page 24 of 92
7.2. Refuting the allegations of arbitrariness and illegality, it
is asserted that the impugned actions are not only give
rise to transparency, but also it is reasonable and
rational. Lawful decision taken being bona fide and in
the public interest, the writ petition warrants no
interference by way of judicial review of decision taken
by the authorities.
Hearing:
8. As the pleadings are completed and this Court on
29.03.2023 in consideration of interlocutory application
bearing No.4417 of 2023 passed the following order:
“In view of interim order dated 06.04.2022 passed in I.A.
No.2662 of 2021 arising out of W.P.(C) No. 10280 of 2021,
as an interim measure, this Court permits the petitioner to
lift the agreed quantity of Bauxite for the remaining period
of the financial year 2022-23 subject to payment of
Rs.1,000/- per MX which price will be exclusive of
royalty, DMF & NMET, GST, weighment and sampling
analysis charges, which will be charged extra, upon the
petitioner furnishing an undertaking, for the differential
amount, with the floor price arrived at by the OMC under
Rule 45 of the Minerals (Other than Atomic and Hydro
Carbon Energy Minerals) Concession Rules, 2016, as
amended, subject to the final outcome of the writ petition.
It is made clear that the agreement, which is valid till
19th April 2023, shall continue till that period subject to
extension granted by the Government on the application of
the petitioner.”
W.P.(C) No.9617 of 2023 Page 25 of 92
8.1. The learned counsel representing respective parties
agreed for final hearing of the matter.
8.2. Heard Sri Vikas Singh, learned Senior Advocate assisted
by Ms. Deepika, Mr. Prashanta Kumar Nayak and Mr.
Shibashis Mishra, learned Advocates representing the
petitioner; Sri Raj Kumar Mehta, learned Senior
Advocate assisted by Sri Pravat Kumar Muduli, learned
Advocate and Ms. Himanshi Andley, learned Advocate
representing opposite party No.1; Sri Pitambar Acharya,
learned Advocate General assisted by Sri Saswat Das,
learned Additional Government Advocate representing
opposite party No.2 and Sri Prasanna Kumar Parhi,
learned Deputy Solicitor General of India representing
opposite party No.3.
8.3. Upon conclusion of hearing, the matter stood reserved
for preparation and pronouncement of judgment/order.
Submissions made by the petitioner:
9. Elaborating the doctrine of promissory estoppel, learned
Senior Advocate submitted that it can be construed as a
cause of action, subject of course to very extreme cases,
such as, change in the policy, change in the statute or
involvement of public interest, which are absent in the
instant case. Placing reliance on the agreement dated
05.10.2004 he would submit that the Joint Venture
Agreement entered into between the OMC and the
W.P.(C) No.9617 of 2023 Page 26 of 92
petitioner-company to facilitate setting up aluminium
complex in Odisha and such contract between the JVC
and the OMC for raising of bauxite included LTL
agreement between the Vedanta and the OMC for
purchase of bauxite mines from the mines. Raising cost
would include the cost associated with the mining of
bauxite from the mines.
9.1. Referring to definitions contained in Section 2 of the
Mines and Minerals (Development and Regulation) Act,
1957, it is submitted that in the event a Mining Lease is
not granted by the Government of Odisha for the
Karlapat Mine, any other bauxite mine having at least an
equal quantity of bauxite deposit (subject to having at
least a composite quantity of 150 million tonnes when
taken along with Lanjigarh Mines) should be made
available by the OMC with due approval of Government
of India/Government of Odisha and all references
contained herein in respect of the Karlapat Mines shall
apply mutatis mutandis to such other substitute mine(s)
as and when Vedanta proceeds to set up an integrated
Aluminium Smelter in the State of Odisha.
9.2. The ―definitive agreements‖ clause of the Agreement
dated 05.10.2004 provided as follows:
“Definitive Agreements shall mean the agreements proposed to be
entered into by the parties to give effect to the understandings
contained herein, including among others:
W.P.(C) No.9617 of 2023 Page 27 of 92
i) A Shareholders and Share Subscription Agreement between
OMC and VEDANTA for and in relation to the JVC;
ii) A Raising Contract Agreement between JVC and OMC for and
in relation to the raising of Bauxite in the mines;
iii) A long term purchase agreement between VEDANTA and
OMC for purchase of bauxite mines from the mines.”
9.3. Shareholding pattern contained therein provided that:
“Shareholding pattern: OMC will be allowed 26% of the issued and
paid up equity share capital of the JVC in consideration of expenses
incurred in respect of services rendered by OMC for operating the
mines by the JVC as a raising contractor and 74% of the equity
share capital will be held by VEDANTA. Throughout the tenure of
this Agreement OMC‟s share holding will be minimum 26% of the
issued and paid up share capital free and clear of all liens,
restrictions, security interests and other adverse claims. OMC will
not be required to contribute any cash at any point of time, or make
any financial commitment to the JVC of any nature.”
9.4. Learned Senior Advocate submitted that the controversy
may be traced to the Joint Venture Agreement executed
in the year 2004 between the OMC and the
Sterlite/Vedanta. Under the said arrangement, the
bauxite raised by the JVC was to be purchased by the
Vedanta from the OMC. The consideration payable to the
OMC was to comprise the raising cost, royalty payable to
the Government of Odisha and other statutory dues
payable to the State Government or any other competent
statutory authority. The agreement further stipulated
that until such time the alumina refinery was
operational, Vedanta would pay to the OMC an amount
equivalent to the prevailing rate of royalty for every
W.P.(C) No.9617 of 2023 Page 28 of 92
tonne of bauxite mined. However, from the date on
which both the refinery and the aluminium smelter
became operational, Vedanta was required to pay to the
OMC an amount equivalent to 50% of the prevailing rate
of royalty.
9.5. The bauxite supplies commenced only in 2018 and,
consequently, the contractual mechanism governing the
price of bauxite remained material to the dispute. It is
expressly provided in the agreement that the bauxite ore
extracted from the mines would be utilised exclusively in
the proposed refinery and the OMC would not sell such
bauxite to any other person. The exclusivity of supply is,
thus, an integral component of the arrangement between
the parties.
9.6. Subject to force majeure, in the event in absence of
achieving any milestone specified in the agreement by
the Vedanta due to gross negligence or for the causes
directly attributable to it, the OMC could issue a notice
to Vedanta. Upon receipt of such notice, the parties were
required to discuss in good faith. Upon expiry of the
period of sixty days stipulated for such purpose, and
unless otherwise agreed between the parties, the OMC
could not terminate the agreement by issuing written
notice of termination to Vedanta. During the said period,
however, the obligations of the parties were to continue
to subsist on a best efforts basis. The agreement also
W.P.(C) No.9617 of 2023 Page 29 of 92
incorporated a condition precedent, whereby its coming
into effect was made conditional upon completion of
construction of the refinery, which was completed in
2009.
9.7. He submitted that the entire quantity of bauxite raised
from the concerned mine was to be utilised exclusively in
the proposed aluminium plant to be established at
Lanjigarh by the Sterlite (now named as ―Vedanta‖). The
petitioner relies upon this condition to demonstrate that
the proposed mining arrangement was intended
primarily to secure the supply of bauxite to its
aluminium project. Although the concerned mine did not
ultimately commence production, under the
arrangements contemplated between the parties, the
mines to be identified for securing approximately 150
million tonnes of bauxite were intended to supply the
entire quantity to the petitioner. Another Memorandum
of Understanding (―MoU‖, for short) was executed on
04.04.2007 between the Government of Odisha and the
Vedanta that reveals that the OMC was required to take
necessary steps for executing an agreement with the
Vedanta, subject to the approval of the Government. The
Government of Odisha acknowledged the role of the
Vedanta as a responsible corporate entity having
substantial involvement in employee welfare and social
development. The Vedanta would extend its
W.P.(C) No.9617 of 2023 Page 30 of 92
development-oriented approach to the alumina refinery,
captive power plant and smelter facilities proposed to be
established in the State.
9.8. The MoU also contemplated that, in matters of
employment, preference would be given to persons from
Odisha, including local persons, subject to the
requirements of the project and the possession of
requisite qualifications. Vedanta was further expected to
make efforts to improve the skill levels of such persons,
including through specialised training wherever
necessary. The MoU was to remain valid for a period of
two years from the date of its execution. Any further
extension was to be considered in accordance with the
applicable terms. However, no extension was to be
considered until substantial progress had been made by
the Vedanta in implementing the project, particularly in
relation to construction and development. He referred to
Clause 7 of the MoU, which stipulated that, in the event
of non-implementation of the project, or any part
thereof, the corresponding support or obligations of the
Government of Odisha under the MoU in relation to
bauxite mines, coal blocks, incentives and concessions
would stand withdrawn.
9.9. The MoU, 2007 constituted clear indication of the
proposed expansion of the project to include the
aluminium smelter at Jharsuguda, Odisha. The
W.P.(C) No.9617 of 2023 Page 31 of 92
petitioner submits that the project subsequently
developed into a major end-to-end aluminium
manufacturing facility, requiring substantial quantities
of alumina and also large quantities of bauxite. The
arrangements contemplated that the State of Odisha
would establish a Special Purpose Vehicle (―SPV‖,
abbreviated) for development of the scheduled area of
Lanjigarh, in which the stakeholders would include the
State of Odisha, the OMC and the Sterlite
2. Provision
was made for contribution towards the development of
the Lanjigarh area from the profits generated from the
relevant operations. The annual report of the SPV was to
be submitted to the Central Empowered Committee
(CEC), constituted by the Supreme Court of India, and
any non-utilisation or improper utilisation of the funds
was to be brought to the notice of the Court.
9.10. Attention is drawn to the Judgment dated 08.08.2008
passed in I.A. No.2134 of 2007 in W.P.(C) No. 202 of
1995, titled T.N. Godavaraman Thirumulpad Vrs. Union of
India & Ors., [(2008) 11 SCR 1091], wherein the Hon‘ble
Supreme Court of India recorded the Petitioner‘s
acceptance of several onerous conditions as a
prerequisite for Forest Clearance, including:
i) The accounts of SPV will be prepared by the
statutory auditors of the OMC, and they shall be
2
See, T.N. Godavaraman Thirumulpad Vrs. Union of India, (2007) 12 SCR 447.
W.P.(C) No.9617 of 2023 Page 32 of 92
audited by the Auditor General for State of Odisha
every year. M/s Sterlite Industries India Ltd.
(―Sterlite‖, for convenience) will deposit, every year
commencing from 01.04.2007, 5% of its annual
profits before tax and interest from Lanjigarh
Project or Rs 10 crores whichever is higher for
Scheduled Area Development with the said SPV
and it shall be the duty of the said SPV to account
for the expenses each year. The annual report of
SPV shall be submitted to CEC every year. If CEC
finds non-utilisation or misutilisation of funds the
same shall be brought to the notice of the Court.
While calculating annual profits before tax and
interest Sterlite shall do so on the basis of the
market value of the material which is sold by the
OMC to the Sterlite or its nominee.
ii) In addition to what is stated above, Sterlite shall
pay NPV of Rs.55 crores and Rs.50.53 crores
towards Wildlife Management Plan for Conservation
and Management of Wildlife around Lanjigarh
bauxite mine and Rs. 12.20 crores towards tribal
development. In addition, Sterlite shall also bear
expenses towards compensatory afforestation.
The Hon‘ble Supreme Court, vide order dated
08.08.2008, further acknowledged that this additional
financial outlay, undertaken by the Petitioner pursuant
W.P.(C) No.9617 of 2023 Page 33 of 92
to the previous order dated 23.11.2007, might actually
entitle it to a reduction in bauxite pricing below the rates
originally stipulated in the 05.10.2004 Agreement. The
Hon‘ble Supreme Court mandated that:
“12. If at the end of the accounting year of SIIL, CEC
finds that the annual profits before tax and interest
is depressed by the pricing mechanism mentioned in
joint venture agreement dated 05.10.2004 vide
Clause 2.3.3(a) then it would be open to CEC to
move this Court with the suggested price mechanism
in its report.”
9.11. The arrangements also contemplated payment towards
the Net Present Value (NPV) which includes wildlife
management and conservation, compensatory
afforestation and other measures connected with
rehabilitation and environmental protection. A statement
was also required to be filed regarding the persons
proposed to be absorbed on a permanent basis,
including land losers, as well as persons proposed to be
employed through contractors. The State Government
placed certain suggestions before the Court. It was
indicated that, if CIL accepted the rehabilitation
package, it would be at liberty to approach the Court by
an appropriate application. The rehabilitation package
was accepted by CIL without any condition. The CEC
observed that the annual profit before tax and interest
could be affected by the pricing mechanism contained in
W.P.(C) No.9617 of 2023 Page 34 of 92
Clause 2.3.3(A) of the Joint Venture Agreement dated
05.10.2004.
9.12. The petitioner asserts that the price payable for bauxite
was not intended to be determined unilaterally and any
alteration was to be considered on the basis of the
financial accounts and the report of the competent
auditing authority.
9.13. The OMC had been unable to obtain the requisite mining
leases over Lanjigarh, Karlapat or any other identified
mine. Though the OMC is stated to have made efforts to
secure the leases, but failed. This could be attributed to
the OMC, but to be treated as default on the part of
Vedanta. Notwithstanding the uncertainties surrounding
the availability of bauxite, it had invested more than
₹6,000 crore in establishing the Lanjigarh alumina
refinery and had commissioned the refinery in less than
thirty months. The refinery started operation with
bauxite procured from external sources, resulting in
substantial losses, which, according to Vedanta, had
accumulated to more than ₹3,000 crore. It had made
substantial downstream investments, including in the
aluminium smelter and captive power facilities at
Jharsuguda, in fulfilment of the commitments arising
from the MoU and related arrangements. The assurance
regarding availability of bauxite had constituted the
foundation for the investment made in the refinery and
W.P.(C) No.9617 of 2023 Page 35 of 92
downstream facilities. It is, therefore, contended that the
substantial investments made in Odisha had been
undertaken on the strength of the commitments and
assurances extended by the State and the OMC. It is
further submitted that the scale of the aluminium
smelter and associated facilities established by it
demonstrate the magnitude of the investment and the
extent to which the project was dependent upon reliable
and assured supply of bauxite.
9.14. Learned Senior Advocate urged that it had become one
of the largest investors in the State and had generated
substantial employment opportunities. Its continued
commitment towards the industrial development in
Odisha includes providing preference to local persons in
employment.
9.15. Section 10A and Section 17A(2)(b) as amended in the
Mines and Minerals (Development and Regulation) Act
on and from 26.03.2015 brought about change and such
change put restrictions having bearing upon the
continuation of the Joint Venture arrangement.
According to the petitioner, the statutory requirement by
way of amendment constituted a substantial impediment
to the structure of the original Joint Venture. In view of
the amendment to the MMDR Act in 2015, the
Government company was required to hold more than
74% of the Joint Venture and the Joint Venture partner
W.P.(C) No.9617 of 2023 Page 36 of 92
was required to be selected through a competitive
bidding process. The petitioner, however, contends that
the statutory restriction related to the manner in which
mining could thereafter be undertaken did not
extinguish the separate commitment regarding supply of
bauxite to the refinery. Thereafter, in terms of Clause
2.3.3(F) of the Joint Venture Agreement, the OMC called
upon the petitioner to participate in discussions in
relation to the show-cause notice proposing termination
of the Joint Venture. Although the Joint Venture
Company had been formed, no bauxite had been raised
by the OMC and the requisite mining lease had not been
granted in respect of Lanjigarh, Karlapat or other
identified areas. Relying upon the commitments to the
State as per the MOU and the Joint Venture in order to
secure 150 million tonnes of bauxite, it commissioned
the alumina refinery with captive power facilities at
Lanjigarh and the aluminium smelter with captive power
facilities at Jharsuguda. Approximately 2,060 acres of
land were acquired for establishing the refinery facility,
with corresponding compensation and rehabilitation
obligations. It also claims to have generated substantial
employment, incurred significant expenditure and
contributed to the development of downstream and
ancillary industries and to the State exchequer. Hence,
unilateral termination of the Joint Venture arrangement,
which constituted the principal instrument for securing
W.P.(C) No.9617 of 2023 Page 37 of 92
the contemplated supply of 150 million tonnes of
bauxite, would jeopardise the project and render the
substantial investment made by it commercially
redundant. Against this background, the petitioner
requested that the commitments contained in the 2004
arrangement relating to supply of 150 million tonnes of
bauxite be protected and continued.
9.16. The OMC, in its counter-affidavit, acknowledged that the
alumina refinery established by Vedanta was facing an
acute shortage of bauxite ore and stated that increasing
production of bauxite in the State was in the interest of
economic development. The Joint Venture agreement
dated 18.02.2009/ was ultimately terminated on
30.09.2015 (Annexure-107).
9.17. The petitioner thereafter made a representation to the
Chief Minister. A Gazette Notification No.1478, dated
17.10.2015 (Annexure-109) was also issued subsequent
to the termination, whereby, inter alia, it was recorded
that the terms and conditions were issued for grant of
mining lease for bauxite over an area of approximately
721.323 hectares in Lanjigarh in favour of the OMC with
additional condition that the entire quantity of bauxite
raised from the area was to be utilised exclusively in the
proposed alumina plant at Lanjigarh to be established
by the Sterlite/Vedanta. The notification further
recognised that, after the amendment to the MMDR Act,
W.P.(C) No.9617 of 2023 Page 38 of 92
it would not be permissible for the Government to
transfer the mine of OMC to a Joint Venture Company in
which private parties held a controlling stake. A High-
Level Committee comprised of six members headed by
the Chief Secretary was constituted by virtue of said
notification. According to the petitioner, the purpose of
the Committee was to examine and devise an
appropriate mechanism for ensuring long-term supply of
bauxite to the petitioner‘s alumina refinery in view of the
legal impediment created by the amended statutory
framework. On 24.11.2015, the petitioner was given an
opportunity to place its case before the Committee. The
petitioner expressed its expectation that the Committee
would appreciate the gravity of the situation and make
suitable recommendations for ensuring long-term supply
of bauxite to the Lanjigarh refinery.
9.18. Referring to its representation dated 13.11.2015, it is
contended that the petitioner made substantial
investments in the State on the basis of repeated
assurances to make bauxite available on the terms and
conditions earlier agreed to between the parties. In
absence of firm commitment regarding supply of bauxite
in accordance with the Joint Venture arrangement the
petitioner is at disadvantageous position. The MMDR Act
is not silent about reservation of areas for mining
operations by the State Government or by Government
W.P.(C) No.9617 of 2023 Page 39 of 92
Companies or Corporations owned or controlled by it.
The statutory framework contemplated different modes
by which mining operations could be undertaken,
including by the State itself, through a Government
Company or Corporation, or through arrangements
requiring the approval of the Central Government.
Section 17A(2) of the said Act provides scope for the
State Government with the approval of the Central
Government to reserve an area not already held under a
prospecting or mining licence for undertaking
prospecting or mining operations through a Government
company or Corporation owned or controlled by it. The
restriction of five-years introduced by virtue of the Mines
and Minerals (Development and Regulation) Amendment
Act, 2015 was not in vogue under the earlier statutory
framework and, therefore, it could not retrospectively
defeat the rights and commitments arising from the
earlier arrangements.
9.19. The MC Rules, 2016, having introduced formula for
calculating the average sale price of metallurgical-grade
bauxite used in the extraction of alumina and
aluminium are intended for determining the value of
mineral blocks for the purpose of auction and grant of
mineral concessions and it has no bearing to govern the
mercantile sale of bauxite already extracted and offered
for sale. Notwithstanding the introduction of the
W.P.(C) No.9617 of 2023 Page 40 of 92
formula, the State Government authorities did not apply
the same mechanism while determining the price of
bauxite supplied to it. Subsequently, however, the State
sought to rely upon the said formula for fixing the floor
price for bauxite auctions.
9.20. The rights and commitments arising from arrangement
in agreement of the year 2004 had already accrued prior
to the Mines and Minerals (Development and Regulation)
(Amendment) Act, 2015. It made payments aggregating
approximately ₹140 crore, including ₹55 crore towards
NPV, ₹50 crore towards the wildlife management plan,
₹12 crore towards tribal development and ₹2 crore
towards compensatory afforestation. The petitioner is
willing to fulfil its commitments concerning the refinery
and smelter. The OMC cannot be permitted to take
advantage of its own failure to pursue the requisite
proceedings and obtain the necessary approvals for
commencement of mining operations. After a prolonged
period during which the petitioner was required to
procure bauxite from the open market, the State
introduced a policy which, according to the petitioner,
provided the first viable mechanism for obtaining
bauxite through LTL.
9.21. Having the position being apprised, Sri Vikas Singh,
learned Senior Advocate would confined his argument by
laying stress on the principle of promissory estoppel. He
W.P.(C) No.9617 of 2023 Page 41 of 92
laid much emphasis on the decisions rendered in the
case of Motilal Padampat Sugar Mills Co. Ltd. Vrs. State of
Uttar Pradesh, (1979) 2 SCC 409 and subsequent
decisions affirming that principle. Despite absence of
any alternative bargaining power and the urgent
requirement to commence regular operations, it accepted
the policy mechanism with the hope of obtaining a
regular supply of bauxite, notwithstanding that the
pricing mechanism was somewhat higher than that
contemplated under the agreement of 2004. Under the
Government of Odisha in Steel and Mines Department
Notification No.1323-VSL-18/14/SM, dated 24.02.2018
[Odisha Gazette, Extraordinary No.292, dated
26.02.2018], with the respect to Bauxite Linkage the
following is stipulated:
“a. 70% of the saleable stock shall be made available
for long-term linkage to the State-based end-users
and the remaining 30% shall be sold through
national e-auction to be done every six months for
price discovery.
b. Weighted average price arrived at from the national
e-auction should be the long-term linkage price for
the appropriate grades of mineral. State-based end-
user plants having long-term linkage can also take
part in the auction.
c. Floor price for the national e-auction may be fixed at
the cost of production plus margin of profit of 50%.”
W.P.(C) No.9617 of 2023 Page 42 of 92
9.22. It is, therefore, contended that the cost of production
plus 50% margin of profit resulted in a price
substantially higher than the price mechanism
contemplated under the agreement of 2004, whereof it
was required to pay the raising cost and the applicable
royalty, with the royalty component being reduced upon
commencement of the smelter.
9.23. Nevertheless, having waited for several years for the
assured supply and having made substantial
investments based on such assurances, the petitioner
accepted the policy mechanism. The floor price was
approximately ₹462 per tonne and the discovered price
was ₹465 per tonne. The petitioner agreed to procure
bauxite at the discovered price. Subsequently, a Long-
Term Linkage Sales Agreement was executed between
the OMC and the petitioner for supply of bauxite for the
period 2018–2023. Under the mechanism adopted, the
long-term sale price would fluctuate with each
subsequent auction. A national e-auction was conducted
on 03.10.2018, in which the floor price and discovered
price were stated to be approximately ₹673 per tonne.
Thereafter, a further policy was introduced in 2019 by
way of the Minerals (Other than Atomic and Hydro-
Carbon Energy Minerals) Concession (Amendment)
Rules, 2019. The policy continued the broad mechanism
whereby 70% of the saleable stock was to be supplied
W.P.(C) No.9617 of 2023 Page 43 of 92
through long-term linkage and 30% through national e-
auction. The floor price was again linked to the cost of
production plus a margin of profit. However, this
amendment dated 20.09.2019 introduced a conversion
factor into a formula based for calculating the average
sale price of metallurgical-grade bauxite. According to
the petitioner, the conversion factor had not formed part
of the formula when the relevant provision was initially
introduced in the said MC Rules of 2016. The petitioner,
therefore, disputes the manner in which the formula was
subsequently applied to mercantile sales of bauxite. The
State Government‘s communication recorded that the
formula appeared unrealistic and that its application
would adversely affect the economics of the alumina and
aluminium industry. The average sale price calculated
under the notified formula appeared substantially higher
than the actual value of metallurgical-grade bauxite. The
communication also referred to the price discovered
through transparent electronic auctions conducted by
the OMC and observed that the price discovered through
such auctions was substantially lower than the average
sale price calculated under the statutory formula. The
State Government further noted that the conversion
factor of 6.4% had been derived by backward calculation
from the London Metal Exchange price of aluminium by
taking into consideration the assumed values and
percentages attributable to different components of the
W.P.(C) No.9617 of 2023 Page 44 of 92
production process. The methodology adopted might not
accurately reflect the actual conversion factor and even a
slight variation in the conversion factor could result in a
substantial change in the calculated average sale price.
The State Government recognised that the average sale
price was required primarily for determining the
monetary value of mineral resources and assessing the
eligibility and financial requirements of prospective
bidders participating in auctions for mineral
concessions. The statutory formula was designed for
valuation of mineral resources for the purpose of
auctioning mineral concessions and was not intended to
determine the mercantile sale price of bauxite extracted
from an existing mine. The distinction between a
mineral-block auction and a mercantile sale of extracted
bauxite is fundamental. In the former case, the statutory
formula is relevant for estimating the value of the
mineral concession and determining the financial
parameters for participation in the auction. It does not
govern the price at which already extracted bauxite is
sold.
9.24. While comparable industries such as Hindalco and
NALCO are procuring bauxite at substantially lower
rates, the petitioner was required to pay approximately
₹1,000 per tonne, resulting in a significant disparity in
the cost of raw material. The petitioner continued to
W.P.(C) No.9617 of 2023 Page 45 of 92
request that the price be determined on the basis of the
cost of production plus 50% margin of profit, which,
according to it, was the mechanism contemplated by the
earlier policy. The OMC subsequently raised a demand
of approximately ₹2,000 crore from the petitioner on the
basis that the reserve price determined under the
auction mechanism constituted the applicable price and
that the difference payable by the petitioner was
recoverable as arrears. The petitioner states that, when a
small quantity of bauxite was eventually sold at a price
of approximately ₹3,000 per tonne in one of the later
auctions, it realised that the pricing mechanism had
materially departed from the earlier contractual and
policy arrangements.
9.25. The petitioner acted upon the representations by
establishing the refinery, smelter and captive power
facilities making substantial investments in the State.
The petitioner, therefore, craves that the State cannot
renegade from the representations and commitments on
the basis of which the investments were made.
9.26. The principal submission of the petitioner, therefore,
boils down to application of promissory estoppel vis-a-vis
the termination or restructuring of the Joint Venture on
account of the subsequent statutory amendment
concerning the ownership structure of mining
operations. It is forcefully submitted that
W.P.(C) No.9617 of 2023 Page 46 of 92
notwithstanding the statutory changes and the
constitution of the Joint Venture, the State and the OMC
remained bound to consider and honour the
commitments made regarding supply of bauxite,
particularly in view of the substantial investments and
obligations undertaken by the petitioner. The State
cannot take advantage of its own inability or failure to
secure the mining leases after inducing the petitioner to
make substantial investments on the representation that
adequate bauxite would be made available. Subsequent
statutory amendments may regulate the manner in
which mining rights can be granted or exercised, but the
same cannot retrospectively obliterate or efface the
consequences flowing from such representations,
assurances and commitments made prior thereto. The
petitioner having demonstrably altered its position by
investing substantial resources, the OMC is bound to
comply with the commitment.
Submissions made by the opposite party No.1:
10. Per contra, learned Senior Advocate appearing for the
opposite party No.1-OMC, opposed the contentions and
averments of the writ petitioner and submitted that the
claim made by the petitioner is contrary to the
contemporaneous official records and statutory
interdiction.
W.P.(C) No.9617 of 2023 Page 47 of 92
10.1. He vociferously submitted that the doctrine of
promissory estoppel is not attracted in the instant
matter. The petitioner seeks enforcement of alleged
assurances contained in agreements and seeks a
direction for supply of bauxite at the rates contemplated
under the earlier agreements. Nevertheless, the
agreements relied upon by the petitioner have either
expired, stood terminated, or became incapable of being
implemented by operation of law. Consequently, no
enforceable promise survives on the basis of which the
doctrine of promissory estoppel can be invoked.
10.2. The Memoranda of Understanding executed in 2003 and
2007 contemplated the establishment of an integrated
aluminium complex and the grant of mining leases,
subject to the requisite statutory and environmental
clearances. The obligations of the State were expressly
subject to the constitutional and statutory provisions
governing the project. The relevant MoU also
contemplated that, in the event of non-implementation
of the project, the corresponding support obligations of
the Government would stand withdrawn.
10.3. The mining leases contemplated under the aforesaid
arrangements could not ultimately be granted despite
efforts by the Government of Odisha, the Odisha Mining
Corporation and the petitioner, including proceedings
before the Supreme Court of India. The requisite forest
W.P.(C) No.9617 of 2023 Page 48 of 92
and environmental clearances were not obtained and the
proposals for grant of clearance were ultimately rejected.
Consequently, the underlying mining arrangements
paled into significance for being implemented.
10.4. The Joint Venture Agreement was specifically intended
for the operation of identified bauxite mines and
contemplated that the mining operations would be
undertaken by the Joint Venture Company. The bauxite
raised by the Joint Venture Company was thereafter to
be purchased by the petitioner under the long-term
purchase arrangement at the price determined in
accordance with the agreed mechanism. Thus, the
obligation to raise and supply bauxite under the relevant
arrangement was intrinsically connected with the
existence and operation of the Joint Venture Company
and the availability of the identified mining leases.
10.5. The Joint Venture Company never became operational
and the contemplated mining leases were never
obtained. The arrangement, therefore, became incapable
of being performed. The amendment to the Mines and
Minerals (Development and Regulation) Act, 1957,
particularly the provisions governing existing rights and
the constitution and shareholding of the Government
Companies, further altered the legal framework and
rendered the earlier arrangement incapable of
implementation. The earlier contractual mechanism
W.P.(C) No.9617 of 2023 Page 49 of 92
could not, therefore, be insisted for enforcement, doing
so would be to negate the statutory requirement.
10.6. It is argued that the doctrine of promissory estoppel
cannot be invoked to compel the Government or a
statutory corporation to act contrary to law. No
representation or promise can prevent the State from
enforcing or defy statutory prohibition. It is settled
principle that principle of estoppel cannot override the
law.
3 There is no concept of estoppel against statute and,
thereby, promissory estoppel cannot be employed to
permit or condone a breach of law, nor can it compel a
public authority to perform an obligation which has
become inconsistent with the governing statutory
provisions.
10.7. The earlier agreements ceased to operate by efflux of
time and/or by termination. The arrangements
suggested under the MoU were for a limited duration
and no enforceable right would have survived after their
expiry in the absence of valid extension. The Joint
Venture Agreement was subsequently terminated after
due consideration and after the necessary Governmental
approval.
10.8. After termination of the earlier arrangements, the
petitioner participated in the subsequently introduced
3
See, Krishna Rai Vrs. Banaras Hindu University, (2022) 7 SCR 1104.
W.P.(C) No.9617 of 2023 Page 50 of 92
LTL mechanism and accepted the revised framework for
supply of bauxite. The petitioner applied pursuant to the
Expression of Interest issued by the Odisha Mining
Corporation and participated in the linkage process
without objecting to the termination of the earlier
agreements. It, thereafter, entered into LTL sale
arrangements under the prevailing policy. Such
subsequent conduct demonstrates acceptance of the
altered contractual and policy framework and amounts
to waiver or abandonment of any alleged right founded
upon the earlier arrangements. The conduct of the
petitioner makes the principle of promissory estoppel in
applicable inasmuch as acquiescence does make such
doctrine inapplicable. Having accepted the benefit of the
subsequent LTL arrangements and participated in the
revised mechanism, the petitioner cannot subsequently
seek to revive rights under agreements which had
already expired or got terminated.
10.9. The petitioner also accepted the revised pricing
mechanism. Under the subsequent LTL policy, a
specified proportion of bauxite was to be supplied to
long-term linkage holders and the remaining quantity
was to be disposed of through auction. The petitioner
participated in the revised mechanism and accepted the
applicable pricing framework. It, therefore, of promissory
estoppel, cannot insist upon the pricing mechanism
W.P.(C) No.9617 of 2023 Page 51 of 92
contained in the earlier agreements after having
accepted the subsequent policy regime. The long-term
linkage sale agreement executed subsequently provided
for a specified annual quantity and duration and
incorporated the prevailing policy and pricing
mechanism. The subsequent arrangement, thus,
superseded or replaced the earlier contractual
understanding concerning the supply of bauxite. The
petitioner, having entered into and availed the benefit of
such subsequent arrangements, cannot claim specific
performance or enforcement of the earlier agreements.
10.10. The petitioner had not, at the relevant time,
asserted that the earlier agreements continued to confer
upon it an assured right to receive a specified quantity of
bauxite at the earlier contractual price. It is too late in
the day to set up the claim that the earlier agreements
were only partially terminated and obligation to supply
bauxite at the earlier price continued. The belated claim
demonstrates that it is an afterthought and is
inconsistent with not only statutory interdict, but also
tells about the petitioner‘s conduct of acquiescence and
contrary to the contemporaneous record.
10.11. The petitioner had also received substantial
quantities of bauxite under the subsequent LTL
arrangements. Such supplies were made under the
prevailing policy and not under the pricing mechanism
W.P.(C) No.9617 of 2023 Page 52 of 92
contained in the earlier agreements. It is
incomprehensible on the one hand to accept the benefits
of the subsequent statutory policy framework and seek
to enforce the terms of agreements, which had ceased to
operate on the other.
10.12. The investment made by the petitioner in
establishing its refinery, smelter, power plant and other
facilities cannot, by itself, create an enforceable right to
obtain bauxite at a particular price or quantity contrary
to the prevailing mechanism. Such investments were
made as part of commercial enterprise and cannot be
treated as consideration for compelling the State or the
Odisha Mining Corporation to act contrary to law.
10.13. The claim seeking adjustment of bauxite already
supplied against the quantity contemplated under the
earlier arrangements and further supply at the old
contractual rates was not raised at the appropriate stage
and was introduced subsequently. Such a claim founded
upon promissory estoppel, being belated, cannot be
permitted to revive contractual rights, which had already
ceased to exist.
10.14. The statutory amendments materially altered the
legal position concerning mining rights, the grant of
mining leases and the structure of Government
participation in mining operations. The earlier
W.P.(C) No.9617 of 2023 Page 53 of 92
arrangement contemplated a particular shareholding
and management structure, whereas the amended
statutory framework required a substantially different
structure and competitive process. The earlier Joint
Venture arrangement, therefore, could not lawfully
continue in its original form.
10.15. The statutory and policy developments also
demonstrate that the supply of bauxite was thereafter
governed by the LTL policy and the auction mechanism.
The petitioner was not granted any perpetual or vested
right to receive bauxite at the price prescribed under the
earlier agreements/arrangements. The applicable price
was to be determined in accordance with the prevailing
policy and, wherever applicable, through the auction
mechanism.
10.16. The national e-auction mechanism and the
determination of the floor price are matters governed by
the applicable statutory rules and governmental policies.
The mechanism for determining the average sale price
and floor price has undergone sea change. The Odisha
Mining Corporation, while conducting auctions for
merchant sale of bauxite, is required to operate within
the existing statutory structure and policy framework. It
is fallacious on the part of the petitioner to rely upon the
doctrine of promissory estoppel to compel the Odisha
Mining Corporation or the State Government to supply
W.P.(C) No.9617 of 2023 Page 54 of 92
bauxite at a price which is inconsistent with the law or
the policy presently governing such supply. The doctrine
cannot be invoked to defeat statutory provisions or
render the provisions of the statute nugatory.
10.17. The petitioner‘s subsequent conduct, including its
participation in the long-term linkage process,
acceptance of the revised pricing mechanism and
execution of subsequent supply agreements, is
inconsistent with the assertion of a continuing right
under the earlier agreements. Having accepted the
subsequent arrangement, the petitioner cannot
approbate and reprobate
4 by relying upon the earlier
agreements for the purpose of claiming a more
favourable price or quantity.
10.18. It is, therefore, submitted that no subsisting,
enforceable or legally protected right survives in favour
of the petitioner under the earlier MoUs, Joint Venture
Agreement or long-term purchase arrangement. The
petitioner‘s claim for supply of bauxite at the earlier
contractual price and for adjustment of past supplies
against the earlier contemplated quantity is
consequently untenable. The relief sought for by the
4
See, Samir Ranjan Pradhan Vrs. Union of India, W.P.(C) No.853 of 2023, decided
by this Court vide Order dated 09.01.2025 by referring to V. Chandrasekaran
Vrs. The Administrative Officer, (2012) 10 SCR 603 = 2012 INSC 407; Mum taz
Yarud Dowla Wakf Vrs. Badam Balakrishna Hotel Pvt. Ltd., (2023) 15 SCR 984 =
2023 INSC 949; Suzuki Parasrampuria Suitings Private Limited Vrs. Offi cial
Liquidator of Mahendra Petrochemicals Limited, (2018) 10 SCC 707.
W.P.(C) No.9617 of 2023 Page 55 of 92
petitioner would, in substance, require the State
Government and the Odisha Mining Corporation to act
contrary to the statutory regime and the policies
governing the disposal and supply of bauxite. Such a
direction cannot be issued in exercise of the writ
jurisdiction, particularly where the alleged right is
founded upon agreements which have expired, been
terminated or become incapable of performance by
operation of law.
Arguments advanced by the learned Advocate General:
11. At the outset, learned Advocate General appearing for
the State-opposite party No.2 approached to argue that
the writ petition, so far as it relates to the amended
prayer seeking supply of 150 Million Tonnes of Bauxite
at the pricing mechanism contemplated under the Joint
Venture Agreements dated 05.10.2004 and 18.02.2009
read with the MoUs dated 07.06.2003 and 04.04.2007,
is wholly misconceived, hopelessly barred by delay,
laches, waiver and acquiescence and, therefore, liable to
be dismissed in limine.
11.1. The original MoU dated 07.06.2003 stood superseded
upon execution of the subsequent MoU dated
04.04.2007. The said MoU dated 04.04.2007 itself was
valid only for a period of two years, i.e., till 03.04.2009
and admittedly no extension thereof was ever granted by
W.P.(C) No.9617 of 2023 Page 56 of 92
the State Government. The MoUs, being non-statutory in
nature, cannot be specifically enforced after lapse of
more than sixteen years.
11.2. It is submitted that pursuant to the amendment to the
MMDR Act, 1957, with effect from 12.01.2015, in view of
Section 17-A(2B) due to non-fulfilment of obligations by
the petitioner, the Joint Venture Agreements dated
05.10.2004 and 18.02.2009 were lawfully terminated by
OMC on 29/30.09.2015
5 after providing due opportunity
to the petitioner and after obtaining approval of the
Government of Odisha. The said termination has never
been challenged by the petitioner at any point of time
5
Text of Letter No.12634/OMC/Project/2015, dated 29/30.09.20 15 of OMC
addressed to Sterlite Industries (India) Ltd., Vedanta Aluminium Ltd., 75, Nehru
Road, Vile Parle (East), Mumbai – 400099 reads thus:
“This has reference to the Show Cause Notice dated 20.02.2015 for termination
of the J.V. Agreement dated 18.02.2009/05.10.2004 , your reply dated
03.03.2015 to the said Notice, subsequent discussions held with representatives
of M/s SIIL/VAL namely Shri K.K. Dave, Chief of Operations, Shri S.K. Pattnaik,
V.P. (Corporate Affairs) and Shri N.K. Sharma, Head (Legal) in terms of Clause
2.3.3 (f) of the JV Agreement and your letter dated 28.04.2015.
In your Reply dated 03.03.2015, you have admitted that the Milestones a t Sl.
No.5, 7 & 9 of Annexure-IV to the J.V. Agreement dated 05.10.2004 have not been
achieved.
In the Reply dated 03.03.2015, you have also admitted that OMC made al l
possible efforts to get the Mining Lease in respect of Lanjigarh Mines but the same
could not be achieved due to reasons beyond control of OMC. In the mean time
more than 17 years have expired (from the date of signing of MoU) and 10 years
(from the date of Joint Venture Agreement dated 05.10.2004). In Terms of the
provisions of the MMDR Act, as amended by the MMDR Amendment Act,
2015, the Government Company is required to have more than 74%
ownership in the joint venture and the JV partner is required to be
selected through competitive bidding process. These provisions have come
into force on 12.01.2015.
In the above circumstances, OMC hereby terminates the J.V. Agreem ent
dated 18.02.2009/05.10.2004 between Orissa Mining Corpor ation Limited
and Sterlite Industries (India) Limited/ Vedanta Aluminium Lt d.
The supply of Bauxite to the Refinery would be in accordance with the long-term
linkage policy formulated by the Government.
Since the J.V. Agreement stands terminated, steps may be taken for winding u p
of the J.V. Company formed pursuant to the J.V. Agreement.”
W.P.(C) No.9617 of 2023 Page 57 of 92
and has attained finality. Nearly eleven years after the
petitioner cannot seek revival or indirect enforcement of
agreements/MoUs, which admittedly stood terminated.
11.3. The petitioner regarding alleged ―partial termination‖ of
the Joint Venture Agreements is equally untenable. A
bare reading of the preamble and Clauses 1.1, 2.1, 2.2,
2.3 and allied provisions of the Joint Venture Agreement
dated 05.10.2004 clearly demonstrates that the
agreement was mine-specific and constituted an
indivisible and composite arrangement relating to
Lanjigarh and Karlapat mines. Since no mining lease
was ever granted either for Lanjigarh or Karlapat in
favour of the Joint Venture Company and no approval
was ever accorded by the State Government for
substitution of mines, the entire agreement stood
frustrated and terminated in toto. The petitioner cannot
dissect or selectively enforce isolated clauses of a
composite agreement merely to suit its commercial
convenience.
11.4. The petitioner, despite filing earlier writ petitions, being
W.P.(C) Nos. 9926 of 2020, 22397 of 2020 and 10280 of
2021, never sought for the relief relating to supply of 150
Million Tonnes of Bauxite under the old regime.
11.5. Without prejudice to the aforesaid submissions, it is
further argued by the learned Advocate General that
W.P.(C) No.9617 of 2023 Page 58 of 92
after termination of the Joint Venture Agreements, the
petitioner consciously accepted and acted upon the LTL
regime framed by the State Government. The
termination letter dated 29/30.09.2015 itself assured
supply of bauxite under the prevailing Long Term
Linkage Policy. Pursuant thereto, the petitioner
participated in the process initiated under the amended
LTL Policy dated 24.02.2018, submitted offer pursuant
to Expression of Interest dated 08.03.2018 and
thereafter voluntarily executed LTL Sales Agreements
dated 20.04.2018 and 16.05.2023. Presently, supplies
are being effected under the subsisting LTL Sales
Agreement dated 16.05.2023 valid till 15.05.2028. Thus,
the conduct of the petitioner unequivocally establishes
acceptance of the post-amendment of the MMDR Act in
2015 and, thereby it abandoned right flowing from the
terminated Joint Venture Agreements. Having accepted
benefits under the Long Term Linkage Policy since 2018,
the petitioner is estopped from reopening or resurrecting
claims under the extinguished agreements of 2004 and
2009.
11.6. The doctrine of promissory estoppel as stemmed upon by
the Senior Counsel for the petitioner cannot come to its
rescue inasmuch as the petitioner cannot compel the
State or its instrumentalities to act contrary to statute.
Once Section 17-A(2-B) of the MMDR Act, 1957 came
W.P.(C) No.9617 of 2023 Page 59 of 92
into force with effect from 12.01.2015, any claim seeking
continuation or enforcement of the earlier arrangement
running counter to the amended statutory framework
becomes legally impermissible. Therefore, the plea of
promissory estoppel raised by the petitioner is wholly
misconceived and contrary to settled law.
11.7. So far as the challenge to constitutional validity of
amended Rule 45(1) of the MC Rules, 2016 is concerned,
the same is equally devoid of merit. The Government of
India, in its Counter Affidavit dated 30.08.2021 as well
as Additional Affidavit dated 07.01.2022, has
categorically stated that neither the MMDR Act nor the
Rules framed thereunder prohibit adoption of Average
Sale Price (ASP) methodology for determining floor price
in e-auction and it is within the domain of the OMC to
evolve a suitable pricing methodology for sale of minerals
through transparent auction process.
11.8. Section 13(1) of the MMDR Act, 1957, confers wide rule-
making powers upon the Central Government and the
expression ―and for purposes connected therewith‖
occurring therein has to receive a broad and purposive
interpretation. Therefore, the amendment to Rule 45(1)
squarely falls within the legislative competence and
statutory framework contemplated under the MMDR Act.
Written notes of submission of the petitioner:
W.P.(C) No.9617 of 2023 Page 60 of 92
12. The prayers in the amended writ petition are based on
doctrine of promissory estoppel. It is the petitioner‘s
categorical case that the State of Odisha induced them
to make substantial investments within the State to
establish an integrated aluminium manufacturing plant.
This inducement, vide Agreement dated 05.10.2004, was
based on a clear assurance that the State would provide
150 million tonnes of bauxite — the essential raw
material— at a price parity with other State-based
manufacturers who benefit from captive mine
allocations.
12.1. The guaranteed pricing mechanism was specifically
defined as the cost of extraction plus a 50% royalty.
Under the terms of this promise, bauxite was to be
supplied at extraction cost plus 100% royalty upon the
completion of the refinery, with the royalty rate reducing
to 50% once the smelter became operational. Adhering to
the agreed timelines, the petitioner executed the
requisite investments, and the aluminium-producing
smelter became operational in 2009. Consequently, the
petitioner is legally entitled to receive bauxite at the
promised rate of extraction cost plus 50% royalty.
12.2. Since no bauxite was admittedly supplied to the
petitioner until 2018, the petitioner remained entitled to
the entire supply at the promised rate of cost of
extraction plus 50% royalty. Throughout the eleven
W.P.(C) No.9617 of 2023 Page 61 of 92
years following the refinery‘s inception— and the nine
years after the smelter became operational — the
petitioner received no bauxite supply, whether under the
initial assurance or otherwise. This prolonged failure
caused the petitioner to suffer massive losses amounting
to thousands of crores, a fact repeatedly communicated
to both the State and the OMC.
12.3. In 2018, the petitioner agreed to receive bauxite
under the 2018 LTL Policy at a rate marginally
higher than the original promised price. However,
despite accepting supplies at this adjusted rate, the
petitioner never waived its rights under the initial
assurance. On the contrary, the Petitioner maintained
consistent correspondence with the State, steadfastly
asserting its claim grounded in the doctrine of
promissory estoppel.
12.4. When the State Government sought to entirely renege on
its promise by issuing a fanciful and arbitrary price
demand, vide letters dated 12.05.2023, 04.10.2025 and
06.11.2025, premised on a misinterpretation of Rule 45
of the MC Rules, 2016 (as amended in 2019), the
petitioner was compelled to amend the writ petition. This
amendment formally grounded the claim in the doctrine
of promissory estoppel, seeking the supply of 150 million
tonnes (MT) of bauxite at the specifically assured rate.
W.P.(C) No.9617 of 2023 Page 62 of 92
12.5. Rule 45 is applied strictly at the stage of grant of mineral
concessions. The MMDR Act does not envisage the
imposition of a price mechanism on the merchant sale of
any mineral. Accordingly, the rule-making power under
Section 13 cannot be extended to such sales. The
unilateral application of Rule 45 to determine the
auction price of excavated Bauxite is contrary to the
express mandate under Section 13 of MMDR Act.
12.6. Since the original writ petition as filed in the year 2023
clearly established the petitioner‘s claim on the basis of
the State‘s initial investment inducements, a point left
unrefuted in the counter affidavit of the opposite parties.
This Court permitted the amendment vide Order dated
03.12.2025.
12.7. The Agreement of 2004, which contained the categorical
assurance to supply 150 MT of bauxite at the
aforementioned rates mandated the formation of a Joint
Venture Company (JVC) for exclusive mining and supply
to the petitioner. This JVC was structured with the
Petitioner holding a 74% majority stake and OMC
holding 26%. Despite the Lanjigarh mine being granted
to OMC with the express condition that ‗the entire
quantity of bauxite raised from the area shall be
exclusively used in the proposed aluminium plant to be
set up at Lanjigarh by M/s Sterlite/Vedanta Alumina
Ltd.‘, a condition duly acknowledged by the Hon'ble
W.P.(C) No.9617 of 2023 Page 63 of 92
Supreme Court of India, mining operations could not
commence due to the non-grant of Stage-II Forest
Clearance.
12.8. Following the 2015 Amendment to the MMDR Act, which
prohibited mine allocation to a JVC where private
shareholding exceeded 26%, the agreement was
rescinded solely regarding the formation of the JVC for
mining purposes. However, the State‘s core assurance to
supply 150 MT of bauxite at the agreed rate was never
resiled from. This is evidenced by the Gazette
Notification dated 17.10.2015, which reaffirmed the
State‘s commitment to supply and explicitly reiterated
that the bauxite raised ‗shall be exclusively used … in
the aluminium plant set up at Lanjigarh.‘ It is precisely
because of this subsisting obligation that the State and
the OMC conspicuously failed to deny the applicability of
the Agreement dated 05.10.2004 in their counter-
affidavits to the original writ petition.
Discussion and conclusion:
13. On the conspectus of the facts discerned from the
respective pleadings filed in connection with the instant
writ petition and the submissions advanced by the
respective counsels, the pivotal issue for determination
is squeezed to a solitary ―principle of promissory
estoppels‖ and its applicability in the given situation. It
W.P.(C) No.9617 of 2023 Page 64 of 92
is a specific case of the petitioner that the State of
Odisha induced the petitioner to make a substantial
investment to set up and/or establish the aluminium
manufacturing plants and relying on such
representation, the agreement was entered into on
05.10.2004 stipulating the supply of 150 Million Tonnes
of Bauxite being the raw materials at such price, which
stands on parity with other State based manufacturer
benefited from the captive mine operations. The said
agreement postulates that the petitioner would bear the
cost of extraction plus 50% royalty together with other
statutory dues. Despite such agreement so entered and
the refineries having set up in 2007 and the smelter in
2008-09, no supply of Bauxite was made under such
assurance, which resulted in a massive loss. It is a
specific stand of the petitioner that after framing of 2018
LTL policy, the petitioner was compelled to export the
bauxite at a higher rate than those promised under 2004
agreement but subsequently when the State sought to
renege on its promise upon issuing the demands vide
letters dated 12.05.2023, 04.10.2025 and 06.11.2025 by
misinterpreting Rule 45 of the Minerals (Other than
Atomic and Hydro Carbons Energy Minerals) Concession
Rules, 2016 as amended from time to time. The
petitioner laid the claim on the principles of promissory
estoppel and sought for a direction to supply 150 million
Tonnes of bauxite at a specified assured rate.
W.P.(C) No.9617 of 2023 Page 65 of 92
13.1. The facts succinctly jotted down as above and before we
embark the journey on such peripheral aspects, it would
be apposite to trace the legal history of the doctrine of
promissory estoppel and its successive development to
integrate within the Indian Legal System. The Supreme
Court of India in late 1960‘s made serious endeavour to
trace the legal origin of the promissory estoppel in Union
of India and another Vs. Indo-Afghan Agencies Ltd.,
reported in 1967 SCC OnLine SC 12 = AIR 1968 SC 718 .
The said case pertains to an Export Promotion Scheme
published on October 10, 1962, by the Textile
Commissioner to provide incentives to the exporters of
the woollen goods, which was subsequently extended by
a trade notice dated 1st January, 1963, for exports of
woollen goods to Afghanisthan. The respondent therein
exported the woollen goods of a substantial f.o.b. value.
However, the import entitlement certificate was
restricted to a lesser value to which the respondent
therein raised an objection and ultimately filed a writ
petition in the High Court for a direction that the import
entitlement certificate must be of the same value of the
export and, therefore, the restriction to a lesser value is
contrary to such scheme or the promise which is made
to such exporters. The Supreme Court traces the
historical origin of the doctrine of promissory estoppel
from the judgment rendered in Municipal Corporation of
the City of Bombay Vs. Secretary of State for India in
W.P.(C) No.9617 of 2023 Page 66 of 92
Council reported in 1904 SCC OnLine Bom 73 = ILR
(1905) 29 Bom 580 where Jenkins, C.J. observed as
under:
“The doctrine involved in this phase of the case is often
treated as one of estoppel, but I doubt whether this is a
correct, though it may be a convenient name to apply.
It differs essentially from the doctrine embodied in Section
115 of the Evidence Act, which is not a rule of equity, but
is a rule of evidence that was formulated and applied in
Courts of law; while the doctrine, with which I am now
dealing, takes its origin from the jurisdiction assumed by
courts of equity to intervene in the case of, or to prevent
fraud.”
The Bench, therefore, proceeded to hold that the
Government is not relieved of its liability to act upon the
representation on an undefined and undisclosed ground
of necessity or expediency in the following:
“24. Under our jurisprudence the Government is not
exempt from liability to carry out the representation
made by it as to its future conduct and it cannot on
some undefined and undisclosed ground of
necessity or expediency fail to carry out the promise
solemnly made by it, nor claim to be the judge of its
own obligation to the citizen on an ex parte
appraisement of the circumstances in which the
obligation has arisen. We agree with the High Court
that the impugned order passed by the Textile
Commissioner and confirmed by the Central
Government imposing cut in the import entitlement
by the respondents should be set aside and
W.P.(C) No.9617 of 2023 Page 67 of 92
quashed and that the Textile Commissioner and the
Joint Chief Controller of Imports and Exports be
directed to issue to the respondents import
certificates for the total amount equal to 100% of the
f.o.b. value of the goods exported by them, unless
there is some decision which fails within clause 10
of the Scheme in question.”
13.2. Though not in express terms, the doctrine of promissory
estoppel was considered in a subsequent decision
rendered in Century Spinning and Manufacturing
Company Limited and another Vs. The Ulhasnagar
Municipal Council and another reported in (1970) 1 SCC
582, wherein it was observed that the doctrine of
representation coupled with the promise would apply not
only against the private individuals but also against the
Government, if on the basis of such representation or
promise, the other persons have altered their position to
their prejudice. It further proceeds on the premise that
even if there is no formal execution of an agreement or
contract, it does not absolve the Government to act upon
its representation in the following:
“11. Public bodies are as much bound as private
individuals to carry out representations of facts and
promises made by them, relying on which other
persons have altered their position to their prejudice.
The obligation arising against an individual out of
his representation amounting to a promise may be
enforced ex contracts by a person who acts upon the
promise: when the law requires that a contract
W.P.(C) No.9617 of 2023 Page 68 of 92
enforceable at law against a public body shall be in
certain form or be executed in the manner prescribed
by statute, the obligation may if the contract be not
in that form be enforced against it in appropriate
cases in equity. In Union of India Vs. Indo-Afghan
Agencies Ltd., (1968) 2 SCR 366 this Court held that
the Government is not exempt from the equity arising
out of the acts done by citizens to their prejudice,
relying upon the representations as to its future
conduct made by the Government. This Court held
that the following observations made by Denning, J.,
in Robertson Vs. Minister of Pensions, (1949) 1 KB
227 applied in India:
„The Crown cannot escape by saying that estoppels
do not bind the Crown for that doctrine has long
been exploded. Nor can the Crown escape by
praying in aid the doctrine of executive necessity,
that is, the doctrine that the Crown cannot bind itself
so as to fetter its future executive action.‟
We are in this case not concerned to deal with the
question whether Denning, L.J., was right in
extending the rule to a different class of cases as in
Falmouth Boat Construction Co. Ltd. Vs. Howell,
(1950) 1 All ER 538 where he observed at p. 542:
„Whenever Government officers in their dealings with
a subject take on themselves to assume authority in
a matter with which the subject is concerned, he is
entitled to rely on their having the authority which
they assume. He does not know, and cannot be
expected to know, the limits of their authority, and
he ought not to suffer if they exceed it.‟
W.P.(C) No.9617 of 2023 Page 69 of 92
It may be sufficient to observe that in appeal from
that judgment (Howell Vs. Falmouth Boat
Construction Co. Ltd.) Lord Simonds observed after
referring to the observations of Denning, L.J.:
„The illegality of an act is the same whether the
action has been misled by an assumption of
authority on the part of a Government officer
however high or low in the hierarchy.
***
The question is whether the character of an act done
in force of a statutory prohibition is affected by the
fact that it had been induced by a misleading
assumption of authority. In my opinion the answer is
clearly: No.‟ ”
13.3. However, in Motilal Padampat Sugar Mills Co. Ltd. Vs.
State of Uttar Pradesh and others, reported in (1979) 2
SCC 409, the origin has been succinctly narrated. Its
applicability and nuance of the doctrine of promissory
estoppel has been discussed by recapitulating the trace
of doctrine of promissory estoppel in 1880 from a
judgment rendered in Hughes Vs. Metropolitan Railway
Co. reported in (1877) 2 AC 439 by the House of Lords
but remained in suspended animation until resuscitated
in Central London Property Trust Limited Vs. High Trees
House Limited reported in 1956 (1) All ER 256 by Lord
Denning. It was observed that the aforesaid two
decisions may seem to restrict its applicability to the
cases where the parties have entered into a contract and
W.P.(C) No.9617 of 2023 Page 70 of 92
either of the parties induced the other to believe that the
strict right under the contract would not be enforced.
However, in a subsequent decision, the width and
amplitude of such restriction was doubted in Dunham
Fancy Goods Ltd. Vs. Michael Jackson (Fancy Goods)
Ltd., reported in 1968 (2) All ER 987. For a considerable
period of time, there was a growing tendency on the
applicability of the promissory estoppel doctrine and its
enforceability as a shield not as a sword but the
Supreme Court in the above report held that the Indian
Law does not restrict a limited applicability as a shield
but it can also be used as a sword in the following:
“19. When we turn to the Indian law on the subject it is
heartening to find that in India not only has the
doctrine of promissory estoppel been adopted in its
fullness but it has been recognized as affording a
cause of action to the person to whom the promise is
made. The requirement of consideration has not
been allowed to stand in the way of enforcement of
such promise. The doctrine of promissory estoppel
has also been applied against the Government and
the defence based on executive necessity has been
categorically negatived. It is remarkable that as far
back as 1880, long before the doctrine of promissory
estoppel was formulated by Denning, J., in England,
a Division Bench of two English Judges in the
Calcutta High Court applied the doctrine of
promissory estoppel and recognised a cause of
action founded upon it in the Ganges Manufacturing
Co. Vs. Sourujmull, (1880) ILR 5 Cal 669 = 5 CLR
W.P.(C) No.9617 of 2023 Page 71 of 92
533. The doctrine of promissory estoppel was also
applied against the Government in a case
subsequently decided by the Bombay High Court in
Municipal Corporation of Bombay Vs. Secretary of
State, (1905) ILR 29 Bom 580 = 7 Bom LR 27.
***
24. This Court finally, after referring to the decision in
the Ganges Manufacturing Co. Vs. Sourujmull,
Municipal Corporation of the City of Bombay Vs.
Secretary of State for India and Collector of Bombay
Vs. Municipal Corporation of the City of Bombay
summed up the position as follows:
„Under our jurisprudence the Government is not
exempt from liability to carry out the representation
made by it as to its future conduct and it cannot on
some undefined and undisclosed ground of
necessity or expediency fail to carry out the promise
solemnly made by it, nor claim to be the Judge of its
own obligation to the citizen on an ex parte
appraisement of the circumstances in which the
obligation has arisen.‟
The law may, therefore, now be taken to be settled
as a result of this decision, that where the
Government makes a promise knowing or intending
that it would be acted on by the promisee and, in
fact, the promisee, acting in reliance on it, alters his
position, the Government would be held bound by
the promise and the promise would be enforceable
against the Government at the instance of the
promisee, notwithstanding that there is no
consideration for the promise and the promise is not
recorded in the form of a formal contract as required
W.P.(C) No.9617 of 2023 Page 72 of 92
by Article 299 of the Constitution. It is elementary
that in a republic governed by the rule of law, no
one, howsoever high or low, is above the law.
Everyone is subject to the law as fully and
completely as any other and the Government is no
exception. It is indeed the pride of constitutional
democracy and rule of law that the Government
stands on the same footing as a private individual
so far as the obligation of the law is concerned : the
former is equally bound as the latter. It is indeed
difficult to see on what principle can a Government,
committed to the rule of law, claim immunity from
the doctrine of promissory estoppel. Can the
Government say that it is under no obligation to act
in a manner that is fair and just or that it is not
bound by considerations of “honesty and good
faith”? Why should the Government not be held to a
high “standard of rectangular rectitude while
dealing with its citizens”? There was a time when
the doctrine of executive necessity was regarded as
sufficient justification for the Government to
repudiate even its contractual obligations; but, let it
be said to the eternal glory of this Court, this
doctrine was emphatically negatived in the Indo-
Afghan Agencies case and the supremacy of the rule
of law was established. It was laid down by this
Court that the Government cannot claim to be
immune from the applicability of the rule of
promissory estoppel and repudiate a promise made
by it on the ground that such promise may fetter its
future executive action. If the Government does not
want its freedom of executive action to be hampered
or restricted, the Government need not make a
promise knowing or intending that it would be acted
on by the promisee and the promisee would alter his
W.P.(C) No.9617 of 2023 Page 73 of 92
position relying upon it. But if the Government
makes such a promise and the promisee acts in
reliance upon it and alters his position, there is no
reason why the Government should not be compelled
to make good such promise like any other private
individual. The law cannot acquire legitimacy and
gain social acceptance unless it accords with the
moral values of the society and the constant
endeavour of the Courts and the legislature, must,
therefore, be to close the gap between law and
morality and bring about as near an approximation
between the two as possible. The doctrine of
promissory estoppel is a significant judicial
contribution in that direction. But it is necessary to
point out that since the docrine of promissory
estoppel is an equitable doctrine, it must yield when
the equity so requires. If it can be shown by the
Government that having regard to the facts as they
have transpired, it would be inequitable to hold the
Government to the promise made by it, the Court
would not raise an equity in favour of the promisee
and enforce the promise against the Government.
The doctrine of promissory estoppel would be
displaced in such a case because, on the facts,
equity would not require that the Government should
be held bound by the promise made by it. When the
Government is able to show that in view of the facts
as have transpired since the making of the promise,
public interest would be prejudiced if the
Government were required to carry out the promise,
the Court would have to balance the public interest
in the Government carrying out a promise made to a
citizen which has induced the citizen to act upon it
and alter his position and the public interest likely to
suffer if the promise were required to be carried out
W.P.(C) No.9617 of 2023 Page 74 of 92
by the Government and determine which way the
equity lies. It would not be enough for the
Government just to say that public interest requires
that the Government should not be compelled to
carry out the promise or that the public interest
would suffer if the Government were required to
honour it. The Government cannot, as Shah, J.,
pointed out in the Indo-Afghan Agencies case, claim
to be exempt from the liability to carry out the
promise “on some indefinite and undisclosed ground
of necessity or expediency”, nor can the Government
claim to be the sole Judge of its liability and
repudiate it “on an ex parte appraisement of the
circumstances”. If the Government wants to resist
the liability, it will have to disclose to the Court what
are the facts and circumstances on account of which
the Government claims to be exempt from the
liability and it would be for the Court to decide
whether those facts and circumstances are such as
to render it inequitable to enforce the liability against
the Government. Mere claim of change of policy
would not be sufficient to exonerate the Government
from the liability : the Government would have to
show what precisely is the changed policy and also
its reason and justification so that the Court can
judge for itself which way the public interest lies and
what the equity of the case demands. It is only if the
Court is satisfied, on proper and adequate material
placed by the Government, that overriding public
interest requires that the Government should not be
held bound by the promise but should be free to act
unfettered by it, that the Court would refuse to
enforce the promise against the Government. The
Court would not act on the mere ipse dixit of the
Government, for it is the Court which has to decide
W.P.(C) No.9617 of 2023 Page 75 of 92
and not the Government whether the Government
should be held exempt from liability. This is the
essence of the rule of law. The burden would be
upon the Government to show that the public interest
in the Government acting otherwise than in
accordance with the promise is so overwhelming
that it would be inequitable to hold the Government
bound by the promise and the Court would insist on
a highly rigorous standard of proof in the discharge
of this burden. But even where there is no such
overriding public interest, it may still be competent to
the Government to resile from the promise “on giving
reasonable notice, which need not be a formal
notice, giving the promisee a reasonable opportunity
of resuming his position” provided of course it is
possible for the promisee to restore status quo ante.
If, however, the promisee cannot resume his
position, the promise would become final and
irrevocable. Vide Emmanuel Avodeji Ajaye Vs.
Briscoe, (1964) 3 All ER 556.”
It was held that though the Government owes its duty to
act on its promise, yet it does not absolve in acting on
the precincts of law in the following:
“27. *** Even the truncated passage quoted by the Court
recognised in the last sentence that though, as a
general rule, the doctrine of promissory estoppel
would not be applied against the State in its
governmental, public or sovereign capacity, the Court
would unhesitatingly allow the doctrine to be
invoked in cases where it is necessary in order “to
prevent fraud or manifest injustice”. This passage
leaves no doubt that the doctrine of promissory
W.P.(C) No.9617 of 2023 Page 76 of 92
estoppel may be applied against the State even in its
governmental, public or sovereign capacity where it
is necessary to prevent fraud or manifest injustice. It
is difficult to imagine that the Court citing this
passage with approval could have possibly intended
to lay down that in no case can the doctrine of
promissory estoppel be invoked against the
Government. Lastly, a proper reading of the
observation of the Court clearly shows that what the
Court intended to say was that where the
Government owes a duty to the public to act
differently, promissory estoppel cannot be invoked to
prevent the Government from doing so. This
proposition is unexceptionable, because where the
Government owes a duty to the public to act in a
particular manner, and here obviously duty means a
course of conduct enjoined by law, the doctrine of
promissory estoppel cannot be invoked for
preventing the Government from acting in discharge
of its duty under the law. This doctrine of
promissory estoppel cannot be applied in teeth of an
obligation or liability imposed by law.”
13.4. In Union of India and others Vs. Godfrey Philips India
Ltd., reported in (1985) 4 SCC 369, a three Judge Bench
of the Supreme Court reiterated the principles that if
such provisions are countered to the statutory
provisions, the Government cannot promise something
which is forbidden in law. In the above aspect, the
Supreme Court has held as under:
“13. Of course we must make it clear, and that is also
laid down in Motilal Sugar Mills case, (1979) 2 SCC
W.P.(C) No.9617 of 2023 Page 77 of 92
409 = (1979) 2 SCR 641 that there can be no
promissory estoppel against the Legislature in the
exercise of its legislative functions nor can the
Government or public authority be debarred by
promissory estoppel from enforcing a statutory
prohibition. It is equally true that promissory
estoppel cannot be used 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. We
may also point out that the doctrine of promissory
estoppel being an equitable doctrine, it must yield
when the equity so requires; if it can be shown by
the Government or public authority that having
regard to the facts as they have transpired, it would
be inequitable to hold the Government or public
authority to the promise or representation made by
it, the Court would not raise an equity in favour of
the person to whom the promise or representation is
made and enforce the promise or representation
against the Government or public authority. The
doctrine of promissory estoppel would be displaced
in such a case, because on the facts, equity would
not require that the Government or public authority
should be held bound by the promise or
representation made by it. This aspect has been
dealt with fully in Motilal Sugar Mills case, (1979) 2
SCC 409 = (1979) 2 SCR 641 and we find ourselves
wholly in agreement with what has been said in that
decision on this point.”
13.5. However, in case of Hero Moto Corp Limited Vs. Union of
India and others reported in (2023) 1 SCC 386, the
W.P.(C) No.9617 of 2023 Page 78 of 92
Supreme Court after taking note of the earlier judgments
rendered on the concept of promissory estoppel
unequivocally held that there cannot be any estoppel
against the legislature in exercise of the legislative
functions and the only exception which is carved out to
prevent a fraud or manifest injustice in the following:
“67. The judgment of this Court in Jit Ram Shiv Kumar
Vs. State of Haryana, (1981) 1 SCC 11 again fell for
consideration before a three-Judge Bench of this
Court in Union of India Vs. Godfrey Philips India
Ltd., (1985) 4 SCC 369, which is again authored by
Bhagwati, J. In Union of India Vs. Godfrey Philips
India Ltd., (1985) 4 SCC 369, the judgment of the
learned three-Judge Bench delivered through
Bhagwati, J. holds that what has been held by the
learned two Judges in Motilal Padampat Sugar Mills
Co. Ltd. Vs. State of U.P., (1979) 2 SCC 409 has
been correctly held so and endorses the said
judgment. The said judgment also criticises the view
taken in Jit Ram Shiv Kumar Vs. State of Haryana,
(1981) 1 SCC 11. Within a short period, the issue
again comes up for consideration before another
three-Judge Bench in Express Newspapers (P) Ltd.
Vs. Union of India, (1986) 1 SCC 133. A.P. Sen, J.
speaking for the three-Judge Bench notes the conflict
between the view taken by Bhagwati, J. in Motilal
Padampat Sugar Mills Co. Ltd. Vs. State of U.P.,
(1979) 2 SCC 409 and Kailasam, J. in Jit Ram Shiv
Kumar Vs. State of Haryana, (1981) 1 SCC 11. It
appears that since the judgment was delivered
within a fortnight from the date on which Union of
India Vs. Godfrey Philips India Ltd., (1985) 4 SCC
W.P.(C) No.9617 of 2023 Page 79 of 92
369 was decided, this Court in Express Newspapers
(P) Ltd. Vs. Union of India, (1986) 1 SCC 133 did not
notice the judgment in Union of India Vs. Godfrey
Philips India Ltd., (1985) 4 SCC 369. However, A.P.
Sen, J. in Express Newspapers (P) Ltd. Vs. Union of
India, (1986) 1 SCC 133 held that it was not
necessary for the purposes of the said judgment to
resolve the conflict between the decision of
Bhagwati, J. in Motilal Padampat Sugar Mills Co.
Ltd. Vs. State of U.P., (1979) 2 SCC 409 and
Kailasam, J. in Jit Ram Shiv Kumar Vs. State of
Haryana, (1981) 1 SCC 11. It held that one of the
limitations on the principle of estoppel is that it does
not operate at the level of Government policy.
68. However, a common thread in all these judgments
that could be noticed is that all these judgments
consistently hold that there can be no estoppel
against the legislature in the exercise of its
legislative functions. The Constitution Bench in M.
Ramanatha Pillai Vs. State of Kerala, (1973) 2 SCC
650 has approved the view in American
Jurisprudence that the doctrine of estoppel will not
be applied against the State in its governmental,
public or sovereign capacity. It further held that the
only exception with regard to applicability of the
doctrine of estoppel is where it is necessary to
prevent fraud or manifest injustice. The analysis of
all the judgments of this Court on the issue would
reveal that it is a consistent view of this Court,
reiterated again in Union of India Vs. Godfrey Philips
India Ltd., (1985) 4 SCC 369, that there can be no
promissory estoppel against the legislature in the
exercise of its legislative functions.”
W.P.(C) No.9617 of 2023 Page 80 of 92
13.6. It would be pertinent to refer a Division Bench judgment
of Delhi High Court rendered in connection with the
petitioner, viz., Union of India Vs. Vedanta Limited
reported in AIR Online 2021 Del 603. The Delhi High
Court in lucid terms held that the moment the
promissory estoppel is projected as an instrument of
attack against the utilization of the natural resources,
the same cannot be propelled before the Court of law. In
connection with the above, it is held as under:
“71. The learned Solicitor General had also contended
that indirectly and subtly the prayers of the
petitioners in the writ petition were based upon
principles of promissory estoppel and legitimate
expectation, and were misconceived as in
Government contracts, wherein overwhelming public
interest is involved, concerning the utilization of
natural resources held in public trust, the said
doctrines, viz, promissory estoppels and legitimate
expectations cannot be invoked. We are in complete
agreement with the contentions raised by the
learned Solicitor General, especially when the
decision of Union of India for the extension of the
period of PSC on the condition of 10% higher
Government share in Profit Petroleum is by way of
Policy Decision, uniformly applicable to all PSCs in
the Country and has its genesis in public interest
and Constitutional mandate.
***
74. For the reasons mentioned above by us, which we
are not repeating, the judgment in GNCTD Vs.
W.P.(C) No.9617 of 2023 Page 81 of 92
Bhushan Kumar (supra) is also of no avail to the
petitioners. In the said case, the Government of
NCTD had invited the applications through industrial
units situated in non-conforming areas, for allotment
of plots for relocation in terms of a scheme
formulated by it and a certain area of the plot was
offered and applied for by the respondents therein.
Subsequently, however, there was a dispute with
regard to the measurement of the plots in question.
The Government supported its action of downsizing
the plot by alleging that there was scarcity of land
and also that the decision was in consonance with a
policy decision approved by the Cabinet. In these
facts, the Hon‟ble Supreme Court considered the
issue involved as to whether the binding contract
could be modified, novated or cancelled, once it
stood concluded and the parties were bound and
governed by its terms and conditions. It was held
that a policy by itself is not law which has the effect
of thrusting new terms and conditions upon a
contracting party. We repeat and reiterate that the
appellants herein are not imposing a condition which
has the effect of novation of a contract as the parties
had willingly incorporated a term in the PSC that the
extension beyond the current term would be on
mutually agreed terms. Despite strenuous
arguments, learned Senior Counsel for the
petitioners has been unable to show any provision in
the PSC binding the contracting parties thereto into
extension of the duration of the PSC, on the same
terms and conditions of the share of Profit Petroleum,
as existed on 15th May, 1995.”
13.7. In Manuelsons Hotels Private Limited Vrs. State of Kerala,
(2016) 3 SCR 718, it has been observed as follows:
W.P.(C) No.9617 of 2023 Page 82 of 92
“21. In fact, we must never forget that the doctrine of
promissory estoppel is a doctrine whose foundation
is that an unconscionable departure by one party
from the subject matter of an assumption which may
be of fact or law, present or future, and which has
been adopted by the other party as the basis of
some course of conduct, act or omission, should not
be allowed to pass muster. And the relief to be given
in cases involving the doctrine of promissory
estoppels contains a degree of flexibility which
would ultimately render justice to the aggrieved
party. The entire basis of this doctrine has been well
put in a judgment of the Australian High Court
reported in The Commonwealth of Australia Vrs.
Verwayen, 170 C.L.R. 394, by Deane, J. in the
following words:
1. While the ordinary operation of estoppel by
conduct is between parties to litigation, it is a
doctrine of substantive law the factual
ingredients of which fall to be pleaded and
resolved like other factual issues in a case. The
persons who may be bound by or who may
take the benefit of such an estoppel extend
beyond the immediate parties to it, to their
privies, whether by blood, by estate or by
contract. That being so, an estoppel by conduct
can be the origin of primary rights of property
and of contract.
2. The central principle of the doctrine is that the
law will not permit an unconscionable— or
more accurately, unconscientious— departure
by one party from the subject matter of an
assumption which has been adopted by the
W.P.(C) No.9617 of 2023 Page 83 of 92
other party as the basis of some relationship,
course of conduct, act or omission which would
operate to that other party‟s detriment if the
assumption be not adhered to for the purposes
of the litigation.
3. Since an estoppel will not arise unless the
party claiming the benefit of it has adopted the
assumption as the basis of action or inaction
and thereby placed himself in a position of
significant disadvantage if departure from the
assumption be permitted, the resolution of an
issue of estoppel by conduct will involve an
examination of the relevant belief, actions and
position of that party.
4. The question whether such a departure would
be unconscionable relates to the conduct of the
allegedly estopped party in all the
circumstances. That party must have played
such a part in the adoption of, or persistence
in, the assumption that he would be guilty of
unjust and oppressive conduct if he were now
to depart from it. The cases indicate four main,
but not exhaustive, categories in which an
affirmative answer to that question may be
justified, namely, where that party:
(a) has induced the assumption by express
or implied representation;
(b) has entered into contractual or other
material relations with the other party on
the conventional basis of the assumption;
W.P.(C) No.9617 of 2023 Page 84 of 92
(c) has exercised against the other party
rights which would exist only if the
assumption were correct;
(d) knew that the other party laboured under
the assumption and refrained from
correcting him when it was his duty in
conscience to do so.
Ultimately, however, the question whether
departure from the assumption would be
unconscionable must be resolved not by
reference to some preconceived formula framed
to serve as a universal yardstick but by
reference to all the circumstances of the case,
including the reasonableness of the conduct of
the other party in acting upon the assumption
and the nature and extent of the detriment
which he would sustain by acting upon the
assumption if departure from the assumed
state of affairs were permitted. In cases falling
within category (a), a critical consideration will
commonly be that the allegedly estopped party
knew or intended or clearly ought to have
known that the other party would be induced
by his conduct to adopt, and act on the basis
of, the assumption. Particularly in cases falling
within category (b), actual belief in the
correctness of the fact or state of affairs
assumed may not be necessary. Obviously, the
facts of a particular case may be such that it
falls within more than one of the above
categories.
5. The assumption may be of fact or law, present
or future. That is to say it may be about the
W.P.(C) No.9617 of 2023 Page 85 of 92
present or future existence of a fact or state of
affairs (including the state of the law or the
existence of a legal right, interest or
relationship or the content of future conduct).
6. The doctrine should be seen as a unified one
which operates consistently in both law and
equity. In that regard, “equitable estoppels”
should not be seen as a separate or distinct
doctrine which operates only in equity or as
restricted to certain defined categories (e.g.
acquiescence, encouragement, promissory
estoppel or proprietary estoppel).
7. Estoppel by conduct does not of itself constitute
an independent cause of action. The assumed
fact or state of affairs (which one·party is
estopped from denying) may be relied upon
defensively or it may be used aggressively as
the factual foundation of an action arising
under ordinary principles with the entitlement
to ultimate relief being determined on the basis
of the existence of that fact or state of affairs.
In some cases, the estoppel may operate to
fashion an assumed state of affairs which will
found relief (under ordinary principles) which
gives effect to the assumption itself (e.g. where
the defendant in an action for a declaration of
trust is estopped from denying the existence of
the trust).
8. The recognition of estoppel by conduct as a
doctrine operating consistently in law and
equity and the prevalence of equity in a
Judicature Act system combine to give the
whole doctrine a degree of flexibi1ity which it
W.P.(C) No.9617 of 2023 Page 86 of 92
might lack if it were an exclusively common
law doctrine. In particular, the prima facie
entitlement to relief based upon the assumed
state of affairs will be qualified in a case where
such relief would exceed what could be
justified by the requirements of good
conscience and would be unjust to the
estopped party. In such a case, relief framed
on the basis of the assumed state of affairs
represents the outer limits within which the
relief appropriate to do justice between the
parties should be framed.‟
22. The above statement, based on various earlier
English authorities correctly encapsulates the law of
promissory estoppel with one difference— under our
law, as has been seen hereinabove, promissory
estoppel can be the basis of an independent cause of
action in which detriment does not need to be
proved. It is enough that a party has acted upon the
representation made. The importance of the
Australian case is only to reiterate two fundamental
concepts relating to the doctrine of promissory
estoppels— one, that the central principle of the
doctrine is that the law will not permit an
unconscionable departure by one party from the
subject matter of an assumption which has been
adopted by the other party as the basis of a course
of conduct which would affect the other party if the
assumption be not adhered to. The assumption may
be of fact or law, present or future. And two, that the
relief that may be given on the facts of a given case
is flexible enough to remedy injustice wherever it is
found. And this would include the relief of acting on
the basis that a future assumption either as to fact
W.P.(C) No.9617 of 2023 Page 87 of 92
or law will be deemed to have taken place so as to
afford relief to the wronged party.”
13.8. In Rupesh R. Gaonkar Vrs. State of Goa, (2026) 8 SCR
431 it has been succinctly held as follows:
“23. We are conscious of the well-settled position that the
doctrine of promissory estoppel cannot be
invoked to compel the State to act in violation
of a statute or of the constitutional discipline,
and that even the celebrated enunciation of the
doctrine in M/s. Motilal Padampat Sugar Mills Co.
Ltd. Vrs. State of U.P., (1979) 2 SCR 641 cannot be
pressed so far as to override an express statutory or
constitutional bar. To that extent, we are unable to
accept the submission that promissory estoppel, in
its strict contractual sense, can by itself found a
claim for regularisation contrary to Articles 14 and
16.”
13.9. The cumulative effect of the authoritative judgments
rendered on the doctrine of promissory estoppel leaves
no ambiguity that it is a valid doctrine recognized in
legal parlance and its applicability cannot be restricted
to the private individuals but transgress its boundaries
to the Government or a public authority. Though as a
sound principle of law, it can be used as a sword and
may constitute an integral part of the cause of action,
yet it has an exception attached to it. The basic feature
of the promissory estoppel is founded upon the conduct
of the party, who was induced to alter his position to its
prejudice but equally it would not apply to a given
W.P.(C) No.9617 of 2023 Page 88 of 92
situation aiming at preventing a fraud and/or
misrepresentation. The doctrine loses its applicability
when the promise is contrary to the statutory provisions
or on an overwhelming interest of larger public. It would
not be applicable in relation to utilization of the natural
resources which is wealth and/or asset of the nation
and the Government acts as its custodian.
13.10. Based on such broader principles enunciated in the
above decisions, let us examine whether the facts
involved in the instant case projecting the conduct of the
parties in relation to a transactions vis-a-vis the
statutory provisions relatable to a pricing of the natural
resources, the plea of promissory estoppel has any leg to
stand upon.
14. By way of written note of submission, the petitioner
clearly admitted the fact that in 2018, it agreed to
receive bauxite under the LTL Policy of 2018. However, it
sought to revive its rights under the initial assurance
being made by way of MoUs and Agreements prior to
amendment to the MMDR Act in the year 2015
specifying modality for determination of average sale
price under Rule 45 of the MC Rules, as substituted by
Notification No. G.S.R. 674(E), dated 20.9.2019, which
stands as follows:
W.P.(C) No.9617 of 2023 Page 89 of 92
“Formula for calculating average sale price for
metallurgical grade Bauxite to be used in alumina and
aluminium extraction, Limestone, Tungsten.—
(1) The State Government shall arrive at the average
sale price of metallurgical Bauxite in the following
manner:
Average Sale Price = 52.90% X Percentage of Al2O3
in bauxite on dry basis X Average aluminium price in
Indian rupees for the month as published by IBM X
Conversion factor
6 as notified by the Central
Government.”
14.1. The inconsistent stand taken by the petitioner that it
has been representing the Government of Odisha for
resurrection of the Joint Venture Company with the
OMC so as to get the supply of bauxite at the old price.
For basically two reasons the claim of the petitioner
cannot be countenanced, viz., by participating in the
later process as laid down the amended provisions, it
has acquiesced by its own conduct; this is particularly
so when the JVC came to be terminated being decided in
presence of representative of Sterlite/Vedanta and the
OMC (Annexure-107). Validity of such termination in the
year 2015 was never questioned, which attained finality.
14.2. In this respect, regard may be had to Jaya Chandra
Mohapatra Vrs. Land Acquisition Officer, (2004) Supp.6
SCR 235, wherein it has been stated thus:
6
Conversion factor = 6.40% vide GSR No.675(E), dated 20.09.2019.
W.P.(C) No.9617 of 2023 Page 90 of 92
“Furthermore, in this case the aforementioned order
dated 08.10.1996 has attained finality by reason
whereof the original decree stood amended. The
Executing Court in view of the decision in Bai Shankriben
(Dead) by Natwar Melsingh and Ors. Vrs. Special Land
Acquisition Officer and Anr., (1996) 4 SCC 533, itself
could not have gone behind the decree. The Executing
Court, thus, proceeded to pass the impugned judgment on
a wrong premise. The Executing Court keeping in view its
limited jurisdiction could not have gone into the question
as to whether the Reference Court was correct in passing
the order dated 08.10.1996 amending the decree or not.
The Executing Court did not have any jurisdiction to go
into the said question. A decree passed by a competent
court oflaw can be suitably amended. A decree, so
amended on an application filed by the claimant for
review thereof, becomes final. If the State was
aggrieved by and dissatisfied therewith, it could
have taken the matter by filing an appropriate
application before the High Court. But keeping in view
of the fact that the said order was allowed to attain
finality, the court could not have permitted the State to
reagitate the said question before the Executing Court by
filing an application under Section 4 7 of the Code of Civil
Procedure or otherwise. In a case of this nature, the
principle of estoppel by records shall come into
play.”
14.3. The answering opposite parties have clearly asserted
that the original MoU dated 07.06.2003 stood
superseded upon execution of the subsequent MoU
dated 04.04.2007 and by lapse of period of two years,
said MoU dated 04.04.2007 itself got non-existent as no
W.P.(C) No.9617 of 2023 Page 91 of 92
extension thereof was ever granted by the State
Government. By virtue of the amendment to the MMDR
Act, 1957, with effect from 12.01.2015, in view of
Section 17-A(2-B) of the MMDR Act due to non-
fulfilment of obligations by the petitioner, the JVC dated
05.10.2004 and 18.02.2009 were lawfully terminated by
OMC on 29/30.09.2015
after providing due opportunity
to the petitioner and its representatives. The said
termination remained unassailed by the petitioner at any
point of time and has, thus, attained finality. After long
lapse of time the petitioner cannot seek revival or
indirect enforcement of agreements/MoUs.
14.4. The Letter bearing No.12634/OMC/Project/2015, dated
29/30.09.2015 of the OMC without any ambiguous
terms with the participation of representatives of M/s.
Sterlite Industries (India) Ltd./Vedanta Aluminium Ltd.
in express words spelt out that ―the J.V. Agreement
stands terminated‖. Though representations were being
pursued thereafter nothing tangible occurred to reverse
such position. The same remained final in absence of
any prayer to show indulgence in such termination of
Joint Venture Agreement, this Court desists itself to
exercise power under Articles 226 and 227 of the
Constitution of India.
14.5. In terms of provisions of Section 17-A of the Mines and
Minerals (Development and Regulation) Act, 1957 read
W.P.(C) No.9617 of 2023 Page 92 of 92
with Rule 45 of the Minerals (Other than Atomic and
Hydro Carbons Energy Minerals) Concession Rules,
2016, the modality for computation of Average Sale Price
the opposite parties are justified in raising the demand.
15. In the wake of the above, while dismissing the writ
petition having found no merit, the interim orders
passed in the matter stand vacated. The opposite parties
are at liberty to take follow up action in accordance with
law. In view of disposal of the writ petition, pending
interlocutory application(s), if any, shall stand disposed
of.
(HARISH TANDON)
CHIEF JUSTICE
(MURAHARI SRI RAMAN)
JUDGE
High Court of Orissa, Cuttack
The 1
st October, 2026//Aswini/Bichi/Laxmikant
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