No Power Of Forfeiture Of Security Deposit & First Installment Of Royalty Under UP Minor Minerals Rule: Allahabad HC
The Allahabad High Court observed that there is no power of forfeiture of the security deposit and first instalment of royalty under Rule 34(5) of the U.P. Minor Minerals (Concession) Rules.
The Court was hearing a Writ Petition seeking a writ of certiorari for quashing the order passed by the District Magistrate/District Officer.
The bench of Justice Anjani Kumar Mishra and Justice Jayant Banerji observed, “Upon a consideration of the submissions made and upon a careful scrutiny of the U.P. Minor Minerals (Concession) Rules, 2017 and 2019, we are unable to discern any power of forfeiture.”
Brief Facts-
The Petitioner M/S Deep Builders and another had participated in a bid for a five-year mining lease for sand. Despite being the highest bidder and receiving a Letter of Intent, which led to the payment of 25% of the bid amount as security and an equal amount as the first instalment of royalty, the Letter of Intent was cancelled. The petitioner received no refund, prompting a legal challenge through Writ. However, during the writ petition's pendency, the District Magistrate exercised powers under Rule 34 (4) of the U.P. Minor Minerals (Concession) (Forty Seventh Amendment) Rules, 2019, leading to the forfeiture of the Petitioner's security deposit and the first instalment of royalty resulting in the current Writ Petition.
The Court said that the security deposit as also the first instalment of royalty, which had been deposited by the Petitioner upon cancellation of the Letter of Intent is liable to be refunded. According to the Court, the respondents instead of refunding this amount have forfeited the same, wrongly and illegally and in the absence of any power to do so.
The Court mentioned the decision of the Supreme Court relied on by the Petitioner in Dharmendra Kumar Singh vs. State of U.P. AIR 2020 SC 5360, wherein according to the Court in similar circumstances 9% interest is payable.
Accordingly, the Court quashed the impugned order and directed the respondents to refund the security deposit and the first instalment of royalty deposited by the Petitioner.
The Court also directed that the refund shall be accompanied by simple interest at the rate of 9%, calculated from the date of cancellation of the Letter of Intent till actual payment is made.
Finally, the Court allowed the Writ Petition.
Cause Title: M/S Deep Builders And Another v. State of U.P. (Neutral Citation: 2024:AHC:97545-DB)
Appearance:
Adv. Ashish Malhotra and Adv. Syed Mohd. Fazal