RAKSHANA STEELS PLEA DISMISSED

The AP High Court on Monday upheld the state government’s decision to terminate the Memorandum of Understanding (MoU) between AP Mineral Development Corporation and Rakshana Steels Limited for extracting iron ore and also set up a steel plant in Khammam district.

Rakshana Steels represented by its director U. Kondala Rao moved the HC by filing two writ petitions. According to the petitioner the Centre had reserved 56,690 acres in Bayyaram, Garla and Nealakondapalli mandals of the district in favour of the APMDC for iron ore mining. Later, APMDC entered into an MoU with the firm for exclusive exploration of iron ore for a period of 10 years.

After the agreement, there were allegations that Mr Anil Kumar, sonin-law of former chief minister Y.S. Rajasekhar Reddy had stakes in the company. Then the government asked the Centre to de-reserve the area due to complaints from local tribal organisations and environmentalists that one third of the land allotted for mining covered tribal habitations, roads and railway lines. The Centre issued an order in August 2010, de-reserving the area. Based on the order, the state government issued a GO terminating the MoU.

Dismissing the petitions, Justice L. Narasimha Reddy held that “in case the corporation had a valid lease in its favour, and the petitioner had an agreement with it and the latter had resiled from agreement, the petitioner could have maintained a writ against the corporation by pressing the ground of legitimate expectation.”