Authority: Orissa High Court, Cuttack

Order Date: 01‑Oct‑2026

Case Overview

  • Parties: petitioner – Vedanta Limited (represented by General Counsel Shri Nabal K. Sharma); opposite parties – (1) Odisha Mining Corporation Ltd. (OMC), (2) Department of Steel and Mines, Government of Odisha, (3) Union of India (Ministry of Mines).
  • Nature of proceedings: Writ petition under Articles 226 and 227 of the Constitution seeking (a) enforcement of the 05‑Oct‑2004 agreement for supply of 150 million tonnes of bauxite at the price fixed in the 2004 and 2009 agreements and related MoUs (07‑Jun‑2003, 04‑Apr‑2007); (b) declaration that amended Rule 45(1) of the Minerals (Other than Atomic and Hydro‑Carbons Energy Minerals) Concession Rules, 2016 does not apply to e‑auctions for mercantile sale of bauxite; (c) quashing of letters and demand notices issued by OMC invoking Rule 45(1); (d) direction to fix floor price on cost‑plus‑50 % profit basis as per the 2018 Long‑Term Linkage (LTL) Policy; and (e) various alternative prayers including read‑down of the amendment and refund of amounts collected.
  • Background:
  • 2003 MoU between Government of Odisha and Sterlite Industries (Vedanta’s predecessor) for setting up an alumina refinery at Lanjigarh.
  • 05‑Oct‑2004 agreement where OMC undertook to supply 150 million tonnes of bauxite at a formula of cost of production plus 50 % royalty (later 100 % royalty before smelter, 50 % after).
  • Vedanta invested roughly ₹1,00,000 crore over two decades, built an alumina refinery (commissioned 2009), a smelter and captive power plants.
  • 2014 LTL Policy introduced; 24‑Feb‑2018 notification brought bauxite under LTL, prescribing 70 % of stock for long‑term linkage (LTL) and 30 % for national e‑auction, with floor price = cost + 50 % profit.
  • Three successful e‑auctions (Apr 2018‑Apr 2019) were held under the 2018 policy.
  • 2019 amendment (G.S.R. 674(E), 20‑Sep‑2019) altered Rule 45(1) to include a conversion factor for calculating average sale price; OMC began applying the amended rule to determine floor price, raising the price substantially (≈ ₹1,000 / t, later up to ₹2,000‑₹3,000 / t).
  • Vedanta contended that Rule 45(1) applies only to mine‑block auctions, not to mercantile sales under LTL, and that the amendment violated Section 13 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).
  • Earlier writ petitions (W.P.(C) Nos. 22397 2020, 10280 2021) resulted in an interim order (06‑Apr‑2022) allowing Vedanta to lift the agreed quantity for FY 2022‑23 at ₹1,000 / t (exclusive of royalties, GST, etc.) pending final resolution.
  • Vedanta filed the present petition (W.P.(C) No. 9617 2023) on 25‑Aug‑2026, focusing solely on promissory estoppel to enforce the 2004 agreement.
  • Submissions:
  • Petitioner argued that the State of Odisha, through the 2004 agreement and subsequent MoUs, gave a clear assurance of 150 MT of bauxite at cost‑plus‑royalty, inducing massive investment; the later change of pricing mechanism was arbitrary, violated Article 14, and was ultra‑vires Section 13 of the MMDR Act. Vedanta invoked promissory estoppel, cited Supreme Court precedents, and sought specific performance and refunds.
  • Opposite Party 1 (OMC) counter‑affidavit asserted that the amended Rule 45(1) is a valid statutory mechanism for determining average sale price, applicable to mercantile sales; the 2004 agreement and 2018 LTL Sales Agreement do not contain an independent floor‑price formula, so they must be read in conformity with the prevailing rules. OMC claimed the 2015 termination of the Joint Venture (JVC) was lawful under the amended MMDR Act and that Vedanta had accepted the LTL regime, thereby waiving any right to revert to the old price.
  • Opposite Party 2 (Dept. of Steel & Mines) emphasized that statutory provisions and policy decisions supersede the earlier agreements; the amendment to Rule 45(1) is within the legislative competence of the Central Government and cannot be struck down.
  • Opposite Party 3 (Union of India) reiterated that the MMDR Act and the MC Rules do not prohibit the use of Rule 45(1) for floor‑price determination.
  • Legal Discussion: The Court examined the doctrine of promissory estoppel, its applicability against the State, and the limits imposed by statutory provisions. It noted that while the doctrine can bind the Government where a representation has been relied upon, it cannot be invoked to compel performance of a promise that is contrary to a subsequent statutory amendment or public policy. The Court referenced Supreme Court judgments (e.g., Motilal Padampat Sugar Mills, Union of India v. Godfrey Philips, Hero Moto Corp, Rupesh R. Gaonkar v. State of Goa) establishing that estoppel cannot override clear legislative restrictions or the need to protect public interest in natural‑resource management.
  • Findings:
  • The 2004 agreement and the 2009 MoU were terminated on 29‑30 Sep 2015 following the amendment to the MMDR Act (Section 17‑A(2‑B)) and the termination letter from OMC (Letter No. 12634/OMC/Project/2015). The termination was not challenged and attained finality.
  • Vedanta’s participation in the 2018 LTL process, execution of the LTL Sales Agreement dated 20‑Apr‑2018 and the fresh agreement dated 16‑May‑2023, and acceptance of the floor‑price mechanism demonstrate acquiescence and waiver of any claim to the pre‑2015 pricing.
  • The amendment to Rule 45(1) is a valid exercise of the Central Government’s rule‑making power under Section 13 of the MMDR Act; it applies to the determination of the average sale price for mineral blocks and, by statutory interpretation, also to mercantile sales conducted through e‑auctions.
  • No evidence was found that the State acted arbitrarily, unreasonably, or in violation of Article 14; the pricing changes were made pursuant to statutory directions (e.g., letter dated 19‑Aug‑2020 from the Government of Odisha).
  • Consequently, the doctrine of promissory estoppel cannot be invoked to compel OMC or the State to supply bauxite at the old cost‑plus‑royalty price.
  • Final Outcome:
  • The writ petition is dismissed as being devoid of merit.
  • All interim orders dated 06‑Apr‑2022 and 07‑Apr‑2021 are vacated.
  • The opposite parties are free to pursue any follow‑up action in accordance with law.
  • No relief, refund, or direction regarding the floor‑price methodology is granted to Vedanta.

Topics: Bauxite Supply Dispute, Promissory Estoppel, Mineral Pricing Rules