Forfeiture of security deposit must adhere to principles of natural justice and consider external factors affecting compliance.

1. The present writ petition has been filed for quashing the Letter No. 1423/M dated 03.12.2016 issued by the Deputy Commissioner, Godda (the respondent no.2) to the extent it stipulates that the security amount and the other amount deposited by the petitioner towards settlement of sand ghat at Pathargama Circle, Geruwa river at Mouza Sanathan admeasuring 16.18 acres have been forfeited. Further prayer has been made for issuance of direction upon the concerned respondents to forthwith refund an amount of Rs. 93,85,500/- to the petitioner which was deposited towards security money and 40% of the bid amount for settlement of the aforesaid sand ghat.

2. The factual background of the case as stated in the writ petition is that vide letter no. 505 dated 17.03.2015, certain instructions were issued by the Department of Mines and Geology pertaining to operation of Sand Beds and the auction procedure. An advertisement was issued by the Office of the Deputy Commissioner, Godda, Mineral Section for settlement of sand ghats in the District of Godda by way of public auction. The sand ghat of Geruwa river situated at Korka Panchayat admeasuring 16.18 acres at Mouza Sanathan was also included. The petitioner participated in the public auction and on being declared successful, it was awarded a Letter of Intent by the Office of Assistant Mining Officer, Godda vide letter no. 480/M dated 07.05.2015. The petitioner was directed to deposit a security amount of Rs.18,77,100/- and 40% of the bid amount i.e. Rs.75,08,400/- and it was further directed to get the concerned mining plan approved and to obtain environment clearance. The petitioner deposited the security amount of Rs.18,77,100/- and the aforesaid 40% of the bid amount i.e. Rs.75,08,400/- (in total Rs.93,85,500/-) and its mining plan was also approved. In the meantime, one application being O.A No. 108/2015/E2 was filed by one Niranjan Sharma before the National Green Tribunal, Eastern Zone Bench, Kolkata (in short “NGT, Kolkata”) challenging the sand mining operation in the Geruwa river, District Godda, wherein interim orders were passed restraining operation of sand mining without valid consent to operate from the State Pollution Control Board and the environment clearance. The State Level Environment Impact Assessment Authority (in short “SEIAA”) took a decision to put the environment clearance on hold for sand ghats of Geruwa river in Godda District in view of the pendency of the said O.A in the NGT, Kolkata. The contention of the petitioner is that in spite of its best efforts, its application for grant of environment clearance was not accepted and due to non-availability of the environment clearance, the petitioner could not commence the mining activities. Thus, the petitioner preferred representations on 24.05.2016 and 27.09.2016 before the respondent no.2 for refund of its security money and other deposits but nothing was done. Subsequently, the respondent no.2 vide letter no. 1393/M dated 29.11.2016 issued show cause notice to the petitioner as to why the allotment of sand ghat in favour of the petitioner be not cancelled and it’s security amount and the 40% of the bid amount be not forfeited as it did not deposit the requisite papers pertaining to environment clearance. The petitioner duly replied the said show cause notice on 01.12.2016 stating all the facts in detail and explaining inter alia that it was unable to obtain environment clearance on account of the orders of NGT, Kolkata and without any fault on its part, the security and other deposits should not be forfeited. However, the respondent no. 2 vide impugned letter no. 1423/M dated 03.12.2016 terminated the petitioner’s allotment of the sand ghat and forfeited the security deposit as well as 40% of the bid amount deposited towards settlement of aforesaid sand ghat.

3. The learned Senior Counsel appearing on behalf of the petitioner submits that the respondents cannot forfeit the security amount as well as 40 % of