Allahabad High Court
M/S Suresh Chand Gupta vs State Of U.P. And 3 Others on 1 August, 2024
Bench: Anjani Kumar Mishra, Jayant Banerji
HIGH COURT OF JUDICATURE AT ALLAHABAD Neutral Citation No. - 2024:AHC:123436-DB Reserved on 15.07.2024 Delivered on 01.08.2024 Court No. - 3 Case :- WRIT - C No. - 36029 of 2022 Petitioner :- M/S Suresh Chand Gupta Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Sr. Advocate,Udayan Nandan Counsel for Respondent :- C.S.C. Hon'ble Anjani Kumar Mishra,J.
Hon'ble Jayant Banerji,J.
1. Heard Shri Udayan Nandan, learned counsel for the petitioner and Shri Ankur Tandon for the State.
2. The instant writ petition seeks a writ of certiorari for quashing the order dated 25.04.2019 passed by the District Magistrate, Jalaun at Orai, respondent no.3, whereby the petitioner's security deposit to the tune of Rs. 6,13,34,775/- has been ordered to be forfeited and the revisonal order passed by the Special Secretary, Department of Geology and Mining, U.P. Lucknow, respondent no.2 affirming the order passed by the District Magistrate.
3. Facts of the case briefly stated are that the petitioner, a registered partnership firm, applied and was granted a lease for a period of five years from 19.03.2018 to 18.03.2023 for mining over plot no.596, Khand No.1 area 16.194 hectares situated in village Basrehi, Tehsil Kalpi, District Jalaun. The lease deed is stated to have been executed on 19.03.2018.
4. A notice, alleging illegal mining by the petitioner, was issued by the Additional District Magistrate (Revenue) on 16.08.2018 calling upon the petitioner to submit a reply within 15 days. The reply was submitted on 27.12.2018 denying the allegations in the notice. The same day, the petitioner is also stated to have made an application for surrendering the mining lease on the ground that requisite amounts of minerals were not available for mining. An order was passed by the District Magistrate on 06.02.2019 imposing a penalty of Rs. 20,30,000/- upon the petitioner for the aforesaid illegal mining.
5. On 05.03.2019 another notice was issued to the petitioner alleging illegal mining. It is not in dispute that no reply was filed by the petitioner to this notice.
6. Consequently, on 18.04.2019, the Additional District Magistrate (Revenue), Jalaun at Orai, passed another order imposing penalty of Rs.15,80,000/- upon the petitioner.
7. Thereafter, by the order dated 25.04.2019, the District Magistrate passed the impugned order rejecting the application for surrender of the lease, the lease itself was cancelled and the security deposit of the petitioner was ordered to be forfeited. The petitioner is thereafter, stated to have challenged the order of the District Magistrate by filing a revision before the State Government under Rule 78 of the Minor Mineral (Concession) Rules, 1963 being Revision No.16(R)/S.M./2022.
8. It has been submitted by learned counsel for the petitioner that prior to the filing of the revision, the petitioner had deposited the entire penalty imposed upon him by the orders dated 06.02.2019 and 18.04.2019 and that this ground was specifically taken in the revision filed by the petitioner. However, the revision has been dismissed.
9. Hence this writ petition challenging the order of the District Magistrate, insofar, as he forfeits the security deposit. It is the specific case of the petitioner that it is only this part of the order, which was challenged in revision and the order cancelling the lease of the petitioner was not challenged.
10. The contention of learned counsel for the petitioner is that no order of forfeiture of the security deposit would have been passed without issuing a notice to the petitioner as provided under clause 3.1 of the lease executed in favour of the petitioner, a copy whereof, has been filed as Annexure 4 to this writ petition.
11. The second contention is that there exists no provision for forfeiture of the security deposit and the relevant rules namely, Rule 50, provides for refund of the amount of security deposit except that which is not required to be applied towards any of the purposes mentioned in the rules. This refund is to be made within six months of the determination of the lease.
12. Reliance has also been placed upon Rule 60 of the Minor Mineral (Concession) Rules, 1963, which reads as follows:-
"60. Consequences of contravention of rules and conditions of lease generally:
(1) In case of any breach or contravention by a lessee of any of these rules or conditions and covenants contained or deemed to be contained in the lease except those relating to payment of royalty, rent or other sums due to the State Government, the State Government, after giving the lessee a reasonable opportunity to state his case, determine the lease. The right shall be in addition to and without prejudice to the provisions of rule 59.
(2) If a lease is determined under sub-rule (1), the lessee may be black listed by the District Officer for such period, not exceeding five years, as may be considered proper and during this period no mineral concession under these rules shall be granted to him. An entry in this regard shall be made in the remarks column of the registers of mining lease or the auction lease, as the case may be."
13. Learned counsel for the petitioner has reiterated that the notices issued to the petitioner were only with regard to alleged illegal mining and that no notice as contemplated under clause 3.1 of the lease deed was ever issued to the petitioner. In any case, the petitioner had already deposited the entire penalty to the tune of Rs. 36 lakhs and odd and, therefore, also the order of forfeiture was liable to be set aside and in failing to do so, the revisional court has committed manifest error.
14. It has next been submitted that the entire security to the tune of Rs. 6,13,34,775/- has been forfeited, although the petitioner has been saddled only with a penalty of Rs.36,10,000/- in totality, which amount has, in any case, been deposited by the petitioner.
15. Learned counsel for the petitioner has referred to paragraph 23 of the memo of revision filed by him to show that the deposit of Rs.36,10,000/- towards the penalty imposed upon the petitioner was specifically pleaded in the revision. Although, this deposit has been admitted in the impugned revisional order, no finding in its regard has been returned.
16. Learned Standing Counsel has submitted that twice notices were issued to the petitioner on account of the petitioner indulging in illegal mining. Only the first notice was replied to by the petitioner. No reply was submitted to the second notice. Even the reply that was furnished by the petitioner was not accepted and, therefore, two separate orders of penalty were passed against the petitioner. The fact that the petitioner has deposited the entire penalty as is claimed by him indicates that the petitioner accepted having indulged in illegal mining. Under the circumstances and since the conditions of the lease deed had been violated by the petitioner, repeatedly, the lease of the petitioner was cancelled and the security deposit was forfeited.
17. He has further stated that the amount of penalty to the tune of Rs. 36,10,000/- has been deposited by the petitioner on 09.05.2019 while the order of the District Magistrate cancelling the lease and forfeiting the security deposit was passed on 25.04.2019.
18. It is therefore, contended that the impugned order is perfectly justified and call for no interference.
19. We have considered the submissions made by learned counsel for the parties and perused the record.
20. Clause 1 of Part 3 of the mining lease relied upon by the petitioner, which contains the general conditions of the lease reads as follows:-
"1. नियमों, प्रसंविदाओं और शर्तो को भंग करने पर पट्टा समाप्त किया जा सकता हैः यदि पट्टेदार उत्तर प्रदेश उप खनिज (परिहार) नियमावली 1963 के किसी नियम या इस पट्टे की किसी प्रसंविदा तथा किसी शर्त को भंग करें तो राज्य सरकार पट्टा समाप्त कर सकती है और प्रतिभूति जमा को पूर्णतः या अंशतः जब्त कर सकती है किन्तु प्रतिबन्ध यह है कि पट्टा समाप्त किये जाने के पूर्व पट्टेदार को उन्हें भंग करने का स्पष्टीकरण देने के लिए यथोचित अवसर दिया जायेगा।"
21. A bare perusal of this clause reveals that it empowers the State Government to cancel a lease in case of violation of any condition of the lease and also empowers the State Government to forfeit the security deposit either fully or in part. This power is subject to the condition that such order can be passed only after providing the lease holder an adequate opportunity of explaining the breach.
22. The contention of learned counsel for the petitioner that notices issued to him were only for alleged illegal mining and that no notice as contemplated in the clause 1 of part 3 of the lease was issued to the petitioner.
23. We are also of the considered opinion that no reason has been assigned in the impugned orders as to why the entire security deposit of six crores has been ordered to be forfeited, especially when the penalty imposed for the alleged illegal mining was only to the tune of Rs. 36,10,000/-.
24. In our considered opinion, once the relevant clause in the agreement provides for partial forfeiture or complete forfeiture, the authority should necessarily record reasons why the entire security was being forfeited. This has not been done in the revisional order.
25. Learned counsel for the petitioner has also placed reliance upon Rule 50 of the Minor Mineral (Concession) Rules, 1963, which reads as follows:-
"50. Refund of security deposits: After the determination of a mining lease the amount of the security lying in deposit with the State Government and nor required to be applied to any of the purposes mentioned in these rules shall be refunded to the lessee ordinarily within a period of six months from the date of the determination of the lease."
26. In our considered opinion, Rule 50 quoted above definitely empowered the District Magistrate to apply the security deposit made by the petitioner towards the penalty imposed for illegal mining which penalties had not been deposited by the petitioner. The two orders of penalty were for a total of Rs. 30,10,000/-. However, no other unpaid liability of the petitioner has been pointed out either in the impugned orders or during the course of hearing.
27. Apart from the above, the situation is further confounded by the fact that the penalty imposed upon the petitioner for illegal mining, which in totality amounted to Rs. 36,10,000/-, which had not been deposited prior to the order passed by the District Magistrate, was actually deposited subsequently and prior to the filing of the revision. This fact clearly finds a mention both in the memo of revision as also in the impugned revisional order. However, the impact and consequence of such deposit upon the order of forfeiture has not been considered by the revisional authority.
28. In view of the above and because there appears to be some merit in the submission of learned counsel for the petitioner that in view of Rule 50, the security deposit, part of which was not required to be applied for any other purposes mentioned in the rules was liable to be refunded and since such amount namely the penalty imposed had subsequently and prior to the filing of the revision, been deposited by the petitioner, the revisional authority was definitely required to consider this aspect of the matter. The revisional authority has also failed to record any reason as to why entire security deposit of six crores was required to be forfeited, especially when clause 1 of part 3 of the lease document enabled the State Government to forfeit only part of the security deposit.
29. In our considered opinion, in a case, where the authorities have the power to pass either of two orders, adequate reasons were required to be recorded for passing the more onerous order as also a reason for not opting for the less onerous order, which again has not been done.
30. Since relevant aspect of the matter, which in our considered opinion required due consideration has not been dealt with by the revisional authority, we deemed it fit to set aside the revisional order and remand the matter to the revisional authority to pass a fresh order after hearing the petitioner keeping in mind the observations made herein above.
31. Accordingly, the writ petition is allowed in part. The impugned revisional order dated 25.04.2019, is hereby quashed and the matter is remitted back to the respondent no.2 to pass a fresh order in the light of the observations contained in the body of this judgment.
32. It is also provided that this exercise be completed expeditiously and preferably within a period of six weeks from the date, a certified copy of this order is filed before the revisional authority.
33. There shall however be no order as to cost.
Order Date :- 1.8.2024 Mayank