Vedanta cannot enforce 2004 promise for 150 million tonnes of bauxite after JV termination, Orissa High Court rules

Vedanta relied on MoUs and agreements made in 2003, 2004 and 2007 concerning a proposed alumina project and an intended supply of 150 million tonnes of bauxite at a price linked to extraction costs and royalty.

The contemplated joint venture and mining arrangements did not result in bauxite production, and OMC terminated the Joint Venture Agreements on 29/30 September 2015; Vedanta did not challenge that termination.

From 2018, Vedanta accepted bauxite supplies under the State’s Long-Term Linkage (LTL) Policy and entered into LTL sale agreements, including a later agreement valid until 15 May 2028.

In this writ petition, Vedanta ultimately confined its argument to promissory estoppel and sought enforcement of the earlier commitment to supply 150 million tonnes at the 2004 pricing terms.

Whether the doctrine of promissory estoppel entitled Vedanta to enforce the earlier commitment to supply 150 million tonnes of bauxite at the price contemplated by the 2004 agreement, despite termination of the joint venture and Vedanta’s subsequent participation in the LTL regime.

Whether, in the circumstances, Vedanta could obtain relief requiring OMC and the State to supply bauxite on the earlier terms notwithstanding the statutory and policy framework governing mineral supply and pricing.

Promissory estoppel may, in appropriate circumstances, be invoked against the Government and can support a cause of action where a promisee has relied on a promise and altered its position; however, the doctrine is equitable and cannot compel the State or a public authority to act contrary to statute or an overriding public duty (*Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P.*, *Union of India v. Godfrey Philips India Ltd.*).

The Court also referred to *Hero Moto Corp. Ltd. v. Union of India* on the rule that estoppel cannot operate against the Legislature in the exercise of legislative functions, and to *Manuelsons Hotels Pvt. Ltd. v. State of Kerala* on the equitable and fact-sensitive character of the doctrine.

The Court considered Section 17-A(2-B) of the Mines and Minerals (Development and Regulation) Act, 1957, and Rule 45 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016, as part of the governing statutory framework for the mining arrangements and computation of average sale price.

The Court held that the asserted promise could not be enforced through promissory estoppel in the circumstances.

The 2003 MoU had been superseded by the 2007 MoU, which expired after two years without extension; the Joint Venture Agreements were expressly terminated in 2015 after the statutory amendment, and Vedanta had never challenged that termination.

The Court further relied on Vedanta’s subsequent participation in and acceptance of the LTL supply regime, including its later supply agreements, as conduct inconsistent with reviving rights under the terminated arrangements.

It concluded that promissory estoppel could not be used to revive those arrangements or require supply on terms inconsistent with the applicable legal and policy framework.

It held that, under Section 17-A of the MMDR Act read with Rule 45 of the 2016 Rules, the opposite parties were justified in raising the demand; the interim orders were vacated, and the opposite parties were permitted to take follow-up action in accordance with law.