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IN THE HIGH COURT OF ALLAHABAD
HON'BLE ANJANI KUMAR MISHRA, HON'BLE JAYANT BANERJI, JJ.
M/s. Pragyason Constructions Private Limited - Petitioner
Versus
State Of U.P. And Others - Respondents
Writ C. No. 21022 of 2021
Decided On : 29-05-2024
FORFEITURE - MINING LEASES - Uttar Pradesh Minor Minerals (Concessions) Rules, 1963, Rule 10(3); GO No. 1875/86-2017-57; GO No. 2168/86-2019-57 - The court discussed the provisions of the Uttar Pradesh Minor Minerals (Concessions) Rules, particularly Rule 10(3) which limits the number of mining leases and the area that can be granted to an entity. The court interpreted these provisions as directory rather than mandatory, emphasizing that forfeiture of earnest money is only permissible when documents are found to be false or fabricated. The court concluded that the petitioner had complied with the necessary requirements and was entitled to a refund of the earnest money.
Fact of the Case:
The petitioner sought a refund of Rs. 90 lakhs earnest money after being awarded a mining lease in District Hamirpur. The District Magistrate rejected the refund application, citing the petitioner's failure to submit required documents within the stipulated time, leading to forfeiture of the earnest money.
Finding of the Court:
The court found that the forfeiture of the earnest money was not justified as the petitioner had communicated the issuance of two leases and had complied with the relevant provisions of the amended rules. The court held that the provisions regarding document submission were directory and did not warrant forfeiture.
Issues: Whether the respondents were empowered to forfeit the earnest money deposited by the petitioner for non-compliance with the document submission requirement.
Ratio Decidendi: The court established that forfeiture of earnest money is only permissible when there is a finding of false or fabricated documents. The requirement for document submission was deemed directory, and the absence of a penal clause indicated that non-compliance did not justify forfeiture.
Final Decision: The court allowed the writ petition, quashed the orders of forfeiture, and directed the respondents to refund the earnest money of Rs. 90 lakhs to the petitioner within four weeks.
JUDGMENT :
1. Heard Shri Udayan Nandan, for the petitioner and learned Standing Counsel for the state respondents.
2. The petitioner by means of this writ petition seeks a writ of certiorari for quashing the order dated 16.07.2020 passed by the District Magistrate, respondent no. 2 (annexure 9 to the writ petition) and the order dated 20.11.2020 (annexure 11 to the writ petition) passed by the Secretary, Mines and Minerals, Uttar Pradesh
3. By the order dated 16.07.2020, the District Magistrate has rejected petitioner’s application for refund of earnest money deposited by him for participating in an e-auction for grant of a lease in District Hamirpur for which an advertisement had been issued on 03.01.2020.
4. The order of the District Magistrate has been affirmed in revision by the first respondent, hence, this petition.
5. The facts of the case briefly stated are that an advertisement was issued on 03.01.2020 inviting bids for grant of mining leases in District Hamirpur. The petitioner submitted its bid along with earnest money of Rs. 90 lakhs on 24.04.2020. The bid of the petitioner, being the highest, was accepted. On 05.03.2020, a letter was issued calling upon the petitioner to furnish relevant documents so that a letter of intent could be issued in his favour.
6. In the meantime, the petitioner on 07.03.2020 participated in the bidding for grant of leases in District-Fatehpur which was, however, cancelled.
7. Since, the letter dated 05.03.2020 could not be complied with, allegedly on account of the prevailing pandemic, yet another reminder was issued to the petitioner on 16.05.2020 requiring submission of the relevant documents within three days.
8. It appears that in the meantime, on 14.05.2020, yet another advertisement was published, inviting tenders for grant of mining leases in District Fatehpur. The petitioner participated in the bidding and was issued a letter of intent on 18.06.2020.
9. After this letter of intent was issued, the petitioner on 19.06.2020 represented to the District Magistrate, Hamirpur for refund of the earnest money of 90 lakhs deposited by him for participation in the bidding held consequent to the advertisement dated 3.01.2020. It is this application which has been rejected holding that the petitioner deliberately failed to furnish the required documents within three days after acceptance of his bid as was provided in the tender. This has caused huge loss of revenue to the State. Therefore, petitioner is not entitled to a refund. Accordingly, the earnest money of 90 lakhs deposited by the petitioner was forfeited in favour of the State. Thus order has been affirmed by the revisional authority.
10. The submission of learned counsel for the the petitioner is that the application dated 19.06.2020 seeking refund of earnest money was in accordance with Rule 10(3) of the Uttar Pradesh Minor Minerals (Concessions) Rules, 1963, as amended by the 47th Amendment Rules, 19.10.2019, which provided that no person in the State of Uttar Pradesh can be granted leases in excess of an area of 50 hectares. The Government Order dated 19.10.2019 provides the modalities for refund of earnest money in cases where more than two mining leases have been granted in favour of one entity or the aggregate of leases granted is in excess of 50 hectares.
11. It is additionally reiterated that Rule 10(3) of 47th Amendment Rules limits the maximum number of leases that can be granted in favour of one entity to two and the other condition is that the aggregate area of these two leases cannot exceed 50 hectares.
12. Since, the petitioner had been granted two leases in District-Fatehpur consequent to the advertisement issued on 14.05.2020, the petitioner informed the authorities opting to operate two leases granted in Fatehpur which option was with the petitioner.
13. This amended provision has not been taken into consideration by the respondent while passing the impugned orders. The earnest money would be forfeited, if at all, if
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