# Lakshya Infra. Power Pvt. Ltd v. State of U.P. & Ors

- **Citation:** (2023) 8 ILRA 1114
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-07-19
- **Case number:** Writ-C No. 11292 of 2021
- **Bench:** Siddhartha Varma, Arun Kumar Singh Deshwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/lakshya-infra-power-pvt-ltd-v-state-of-u-p-ors-50507
- **Pages:** 5

## Headnote

Civil Law - U.P. Minerals (Prevention of
Illegal
Mining,
Transportation
and
Storage) Rules, 2018 - Rules 7 & 10 -
Storage licence - Cancellation of licence -
Forfeiture of security - Held, though
petitioner failed to prove compliance of
CCTV and display board condition, but no
finding recorded about financial loss to St.
- Forfeiture of security without such
finding is unsustainable - Word "may"
under Rule 10 indicates discretion, not
compulsion - Action of forfeiture must be
backed with reasons - Forfeiture order set
aside, licence cancellation upheld.

Held: Even if it was found that the CD was not
to the satisfaction of the authority, there was no
finding at all with regard to any financial loss to
the St.. Therefore, the authorities erred in
forfeiting
the
security
amount.
Though
cancellation of licence is upheld, the forfeiture
of security deposit is set aside.

Case Law Discussed:

## Text

1114 INDIAN LAW REPORTS ALLAHABAD SERIES

(b) The G.O. dated 24.02.2020 and
10.08.2022 issued charging the regulatory
fees on the minerals dropped from other
State into the State of U.P. is held valid as
the same has been issued in accordance
with the aforementioned rules and in
furtherance of the new Mining Policy,
2021.

(c) The Regulatory Fees imposed does
not violate Part XIII of the Constitution of
India.

143. Accordingly, the writ petitions
filed
by
the
petitioners
are
hereby
dismissed. Parties to bear their own costs.
----------
(2023) 8 ILRA 1114
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.07.2023

BEFORE

THE HON'BLE SIDDHARTHA VARMA, J.
THE HON'BLE ARUN KUMAR SINGH
DESHWAL, J.

Writ-C No. 11292 of 2021

Lakshya Infra. Power Pvt. Ltd.
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Atul Kumar Tiwari, Sri Nitin Sharma

Counsel for the Respondents:
C.S.C., Sri Sanjai Singh

Civil Law - U.P. Minerals (Prevention of
Illegal
Mining,
Transportation
and
Storage) Rules, 2018 - Rules 7 & 10 -
Storage licence - Cancellation of licence -
Forfeiture of security - Held, though
petitioner failed to prove compliance of
CCTV and display board condition, but no
finding recorded about financial loss to St.
- Forfeiture of security without such
finding is unsustainable - Word "may"
under Rule 10 indicates discretion, not
compulsion - Action of forfeiture must be
backed with reasons - Forfeiture order set
aside, licence cancellation upheld.

Held: Even if it was found that the CD was not
to the satisfaction of the authority, there was no
finding at all with regard to any financial loss to
the St.. Therefore, the authorities erred in
forfeiting
the
security
amount.
Though
cancellation of licence is upheld, the forfeiture
of security deposit is set aside.

Case Law Discussed:

1. Style (Dress Land) Vs Union Territory
Chandigarh & anr., (1999) 7 SCC 89

2. Ranveer Singh Vs St. of U.P. & ors., 2017 (1)
ADJ 240 (DB)

3. Oryx Fisheries Ltd. Vs U.O.I., (2010) 13 SCC
427

Petition partly allowed.

(Delivered by Hon'ble Siddhartha Varma, J.
& Hon'ble Arun Kumar Singh Deshwal, J.)

1. Heard Sri Nitin Sharma, learned
counsel for the petitioner and Sri Rahul
Srivastava, learned Standing Counsel for
the State.

2. The petitioner was granted a
licence for storage under U.P. Minerals
(Prevention
of
Illegal
Mining,
Transportation and Storage) Rules, 2018
(hereinafter referred to as '2018 Rules') for
a period starting from 11.06.2020 and
ending on 15.10.2020 over Gata no.333
area 0.5990 hectare and Gata no.330 area
0.5307 hectare totaling 1.1257 hectares for
the
storage
of
20,000
cubic
meter
sand/morang. The '2018 Rules' provides
that if a licence is provided under Rule 7,
the licensee shall prominently display the
sale price at sale points; shall deploy CCTV
8 All. Lakshya Infra. Power Pvt. Ltd. Vs. State of U.P. & Ors.
1115
cameras and shall provide check gates for
proper monitoring of the stocks. Licensee
shall also maintain a correct and intelligible
account
of
minerals
procured
and
transported daily to different destinations in
the format prescribed in e-form 'C'/ Form
'C'/ Form 'G' which will be corresponding
to the quality of valid transit pass by which
licensee had received the minerals.

3. For convenience, the Rule 7 of the
'2018' Rules is reproduced hereinunder;

"7. General conditions for grant of
Storage licence. - The licence shall be
granted in Form B subject to the following
conditions:

(i) The licensee shall prominently
display the sale price at the storage point.

(ii) The licensee shall deploy CCTV
camera and check gates for proper
monitoring of the stocks

(iii) The licensee shall maintain a
correct and intelligible account of minerals
procured and transported daily to different
destinations in the format prescribed in eForm 'C' / Form 'C' /Form 'G' which will
be corresponding to the quantity of valid
transit pass by which licensee has received
the mineral.

(iv) The licensee shall submit the
monthly return in Form 'E' of the accounts
maintained under clause (ii) and (iii)
respectively for every month within the first
week of the succeeding month to the
District Officer;

(v) All the reports, returns and
registers shall be maintained by the
licensee and kept in the place of business
and be made available to the inspecting
officer;

(vi) The licensee shall not pollute the
environment by storing the minerals or
while utilizing them in the processing plant
or beneficiation' plant or the factory.

(vii) The licensee shall allow the
Inspecting Officers of the Directorate of
Mines to inspect the store, factory,
processing plant, beneficiation plant to
verify the stock of minerals and to take
samples and extract of records.

(viii) The District Officer may impose
such further condition as may be necessary
in the interest of the public."

4. The lincensee on 05.09.2020 on the
basis of the inspection made on 04.09.2020
got a notice that he had not installed CCTV
cameras and had also not displayed the sale
price at the storage point.

5. In reply to the notice, on 07.09.2020
the petitioner submitted his reply along with
CD of the footages of the CCTV cameras. He
had also submitted that display board of sale
price was also there at the storage point. Not
satisfied with the reply, the petitioner's
licence was cancelled under Rule 10 of '2018
Rules'
by
the
District
Magistrate
on
10.09.2020 after recording a finding that the
CD which was supplied by the petitioner did
not provide the date and time of the
recording. He had also given a finding that no
loading and unloading of sand/morang was
found and therefore after disbelieving the
reply given by the petitioner, the licence of
the petitioner was cancelled. Also the security
as was deposited by the petitioner of
Rs.15,00,000/- was forfeited.

6. Aggrieved by the order dated
10.09.2020, the petitioner filed an appeal
under Rule 15 of the '2018 Rules' and upon
dismissal of the appeal, the instant writ
petition has been filed.

7. Learned counsel for the petitioner
has submitted that when the petitioner had
1116 INDIAN LAW REPORTS ALLAHABAD SERIES
submitted the CD of the recording of the
CCTV camera which was installed as per
the Rule 7 of '2018 Rules' then no
punishment ought to have been given to the
petitioner. The display board was also very
much there.

8. Learned counsel for the petitioner,
with regard to the forfeiture of the security,
has submitted that there was absolutely no
reason given in the order for forfeiting the
security money. He submits that if the
security amount had to be forfeited then a
definite finding ought to have been given as
to what was the financial loss which had
occurred to the State which necessitated the
forfeiture of the security amount.

9. Relying upon Rule 10 of the '2018
Rules', the counsel for the petitioner
submits that the punishment as was
provided in Rule 10 states that not only the
licence could be cancelled, but the District
Officer could also forfeit the security
deposit along with the interest accrued
thereon. He, therefore, submits that the
word 'forfeit' did not compulsorily mandate
the forfeiture of the security amount. It was
optional for the District Officer to order for
the forfeiture of the security amount and for
exercising this option, he should have given
reasons.

10. Learned counsel for the petitioner
has relied upon the judgements in the cases
of Style (Dress Land) vs. Union Territory
Chandigarh and another 1999 (7) SCC
89, Ranveer Singh vs State of U.P. and 7
others 2017 (1) ADJ240 (DB) and Oryx
Fisheries Ltd. vs U.O.I reported in 2010
(13) SCC 427.

11. While relying on 1999 (7) SCC
89, learned counsel submitted that when the
statute is silent with regard to when the
forfeiture ought to be done and when it
ought not to be done then the State should
act with prudence and should not impose
the penalty of forfeiture arbitrarily. Since
learned counsel relied on paragraphs 10
and 11 of the judgement reported in 1999
(7) SCC 89 they are being reproduced here
as under;

"10. In the absence of the rules, the
action
of
the
respondents
regarding
imposition of the terms and conditions of
the lease including the enhancement of rent
is required to be fair and reasonable and
not actuated by considerations which could
be termed as arbitrary or discriminatory.
The Government cannot act like a private
individual in imposing the conditions solely
with the object of extracting profits from its
lessees. Governmental actions are required
to be based on standards which are not
arbitrary or unauthorised. This Court in
Ramana Dayaram Shetty v. International
Airport Authority of India while agreeing
with the observations of Mathew, J. held:
(SCC) pp.505-06, para 12)

"12. We agree with the observations of
Mathew, J., n V. Punnen Thomas v. State of
Kerala that:

'The Government is not and should not
be as free as an individual in selecting the
recipients for its largesse. Whatever its
activity, the Government is still the
Government and will be subject to
restraints, inherent in its position in a
democratic
society.
A
democratic
Government cannot lay down arbitrary and
capricious standards for the choice of
persons with whom alone it will deal.'

The same point was made by this
Court in Erusian Equipment and Chemicals
Ltd. v. State of W.B. where the question was
whether blacklisting of a person without
giving him an opportunity to be heard was
bad? Ray, C.J., speaking on behalf of
8 All. Lakshya Infra. Power Pvt. Ltd. Vs. State of U.P. & Ors.
1117
himself and his colleagues on the Bench
pointed out that blacklisting of a person not
only affects his reputation which is, in
Popundian terms, an interest both of
personality and substance, but also denies
him equality in the matter of entering into
contract with the Government and it
cannot, therefore, be supported without fair
hearing. It was argued for the Government
that no person has a right to enter into
contractual
relationship
with
the
Government and the Government, like any
other private individual, has the absolute
right to enter into contract with anyone it
pleases. But the Court, speaking through
the learned Chief Justice, responded that
the Government is not like a private
individual who can pick and choose the
person with whom it will deal, but the
Government is still a Government when it
enters into contract or when it is
administering largesse and it cannot,
without adequate reason, exclude any
person from dealing with it or take away
largesse arbitrarily. The learned Chief
Justice said that when the Government is
trading with the public, 'the democratic
form of government demands equality and
absence of arbitrariness... The activities of
the Government have a public element and,
therefore, there should be fairness and
equality. The State need not enter into any
contract with anyone, but if it does so, it
must do so fairly without discrimination
and
without
unfair
procedure'.
This
proposition would hold good in all cases of
dealing by the Government with the public,
where the interest sought to be protected is
a privilege. It must, therefore, be taken to
be the law that where the Government is
dealing with the public, whether by way of
giving jobs or entering into contracts or
issuing quotas or licences or granting other
forms of largesse, the Government cannot
act arbitrarily at its sweet will and, like a
private individual, deal with any person it
pleases, but its action must be in
conformity with standard or norms which is
not arbitrary, irrational or irrelevant. The
power or discretion of the Government in
the matter of grant of largesse including
award of jobs, contracts, quotas licences,
etc. must be confined and structured by
rational, relevant and non-discriminatory
standard or norm and if the Government
departs from such standard or norm in any
particular case or cases, the action of the
Government would be liable to be struck
down, unless it can be shown by the
Government that the departure was not
arbitrary, but was based on some valid
principle which in itself was not irrational,
unreasonable or discriminatory."

11. Even the administrative orders and
not (sic only) quasi-judicial are required to
be made in a manner in consonance with
the rules of natural justice, when they affect
the rights of the citizens to the property or
the attributes of the property. While
exercising the powers of judicial review the
court can look into the reasons given by the
Government in support of its action but
cannot substitute its own reasons. The
Court can strike down an executive order, if
it
finds
the
reasons
assigned
were
irrelevant and extraneous. The courts are
more concerned with the decision-making
process than the decision itself."

12. Sri Rahul Srivastava, learned
Standing Counsel opposed the writ petition
and submitted that when it was found that
the petitioner had not installed the CCTV
Camera and also had not displayed the sale
price at the storage point then it was
mandatory for the District Officer to
impose the punishment as has been given in
Rule 10 of 'Rules 2018'. He submits that
word 'may' also had to be interpreted in
such a manner that if licence had been
1118 INDIAN LAW REPORTS ALLAHABAD SERIES
cancelled then the forfeiture of the security
had to follow.

13. Having heard the learned counsel
for the petitioner and Sri Rahul Srivastava,
learned Standing Counsel, we are of the view
that the order of the District Magistrate dated
10.09.2020 and the order of the appellate
court dated 18.12.2020 cannot be sustained in
the eye of law. Even if it was found that the
CD was not to the satisfaction to the
authority, there was no finding at all with
regard to the fact that there was any financial
loss to the State. In such view of the matter,
we are of the view the authorities erred in
forfeiting the security amount.

14. Under such circumstances though
we uphold the order of the District
Magistrate dated 10.09.2020 and order of
the Commissioner of appellate court dated
18.12.2020 so far as they cancel the license
of the petitioner, we set aside the orders to
the extent they forfeit the security amount.

15. With the aforesaid observations,
the writ petition is partly allowed.
----------
(2023) 8 ILRA 1118
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.08.2023

BEFORE

THE HON'BLE CHANDRA KUMAR RAI, J.

Writ-C No. 22367 of 2023

Shivnath & Ors. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Abhishek Bhushan, Sri Arpan Srivastava, Sri
Pavan Kumar Pandey, Sri Anil Bhushan, Sri Anil
Bhushan (Sr. Advocate)

Counsel for the Respondents:
C.S.C., Sri Ashok Kumar Rai, Sri Pavan Kumar
Pandey, Sri Rajesh Kumar, Sri Mangla Prasad Rai
(Sr. Advocate)

Constitution of India, 1950 - Article 226 -
When an order is passed in violation of
principles of natural justice, alternative remedy
is no bar - Writ is maintainable.

Civil Law -U.P. Revenue Code, 2006 -
Sections 31/32, 38(4) & 210 - Summary
proceedings - Long-standing entry expunged
without impleading recorded tenure holder -
Violation of natural justice - Orders liable to be
quashed - Direction to hear afresh after
affording opportunity.

Held:
Expunging
a
long-standing
revenue
entry
without impleading the affected parties and
without affording them an opportunity of
hearing violates principles of natural justice.
Even in summary proceedings under Sections
31/32 of the U.P. Revenue Code, 2006, proper
notice must be given to the recorded tenure
holder. Alternative remedy under Section 210 of
the Code does not bar the writ petition where
there is manifest violation of natural justice. The
impugned orders dated 17.2.2018, 9.3.2021,
and 13.4.2023 are set aside. Matter remanded
to
the
Sub-Divisional
Magistrate,
Sadar,
Varanasi for fresh adjudication after affording
opportunity of hearing to the petitioners. Writ
allowed.

Case Law Discussed:

1. Chaturgan Vs St. of U.P. & ors., 2005 (98) RD
244

2. Committee of Management & anr.Vs ViceChancellor & ors., 2009 (1) AWC 437 (SC)

3. Whirlpool Corporation Vs Registrar of Trade
Marks, AIR 1999 SC 22

4. Godrej Sara Lee Ltd. Vs Excise & Taxation
Officer, AIR 2023 SC 781

(Delivered by Hon'ble Chandra Kumar
Rai, J.)