# M/S Deep Builders & Anr v. State of U.P. & Ors. Opp. Parties

- **Citation:** (2024) 5 ILRA 2386
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-05-29
- **Case number:** Writ-C No. 33710 of 2021
- **Bench:** Anjani Kumar Mishra, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-deep-builders-anr-v-state-of-u-p-ors-opp-parties-52082
- **Pages:** 6

## Headnote

Civil Law - Mining Lease - Cancellation of
Letter of Intent - Forfeiture of Security
Deposit and Royalty - U.P. Minor Minerals
(Concession) Rules, 2017 [As amended by
the 43rd Amendment] - Rule 29 - U.P.
Minor
Minerals
(Concession)
(Forty
Seventh Amendment) Rules, 2019, w.e.f.
13.08.2019 - Rule 34(4) - Petitioner
participated in the bidding for the grant of
a mining lease of ordinary sand, a Letter of
Intent was issued, and the petitioner
deposited 25% of the bid amount as
security and an equivalent amount as the
first installment of royalty. Subsequently,
the Letter of Intent was cancelled, and by
the order of the District Magistrate, the
security deposit and first instalment
towards royalty were forfeited in favor
of the State - Held - There exists no
power under the relevant rules to
forfeit the security deposit or the first
instalment once the Letter of Intent has
been cancelled - Impugned order was
without the sanction of law and hence
quashed - State was directed to refund
the security deposit and the first
instalment of royalty deposited by the
petitioner, along with simple interest at
the rate of 9% thereon (Para 21, 25,
26)

Allowed. (E-5)

## Text

2386 INDIAN LAW REPORTS ALLAHABAD SERIES
that the forfeiture of the petitioner's
security deposit of Rs. 90 lakhs is without
any authority of law. Accordingly, this
petition is hereby allowed and the
impugned
orders
16.07.2020
and
20.11.2020 are hereby quashed.

28. The respondents are directed to
refund the security deposit of Rs. 90 lakhs
to the petitioner expeditiously, positively
within a period of four weeks from the date
a certified copy of this order is filed before
them.
----------
(2024) 5 ILRA 2386
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.05.2024

BEFORE

THE HON'BLE ANJANI KUMAR MISHRA, J.
THE HON'BLE JAYANT BANERJI, J.

Writ-C No. 33710 of 2021

M/S Deep Builders & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Opp. Parties

Counsel for the Petitioners:
Ashish Malhotra, Syed Mohd. Fazal

Counsel for the Opp. Parties:
C.S.C.

Civil Law - Mining Lease - Cancellation of
Letter of Intent - Forfeiture of Security
Deposit and Royalty - U.P. Minor Minerals
(Concession) Rules, 2017 [As amended by
the 43rd Amendment] - Rule 29 - U.P.
Minor
Minerals
(Concession)
(Forty
Seventh Amendment) Rules, 2019, w.e.f.
13.08.2019 - Rule 34(4) - Petitioner
participated in the bidding for the grant of
a mining lease of ordinary sand, a Letter of
Intent was issued, and the petitioner
deposited 25% of the bid amount as
security and an equivalent amount as the
first installment of royalty. Subsequently,
the Letter of Intent was cancelled, and by
the order of the District Magistrate, the
security deposit and first instalment
towards royalty were forfeited in favor
of the State - Held - There exists no
power under the relevant rules to
forfeit the security deposit or the first
instalment once the Letter of Intent has
been cancelled - Impugned order was
without the sanction of law and hence
quashed - State was directed to refund
the security deposit and the first
instalment of royalty deposited by the
petitioner, along with simple interest at
the rate of 9% thereon (Para 21, 25,
26)

Allowed. (E-5)

(Delivered by Hon'ble Anjani Kumar
Mishra, J. & Hon'ble Jayant Banerji, J.)

1. Heard Shri Syed Mohd. Fazal,
learned counsel for the petitioner and
learned Standing Counsel for the Staterespondents.

This writ petition seeks a writ of
certiorari for quashing the order dated
28.08.2021 passed by the third respondent,
the District Magistrate/District Officer,
Ghaziabad.

2. By this order and in purported
exercise of powers conferred by Rule 34 (4)
of the U.P. Minor Minerals (Concession)
(Forty Seventh Amendment) Rules, 2019
and for their non compliance, the security
deposited by the petitioner as also the first
instalment consequent to the issuance of
Letter of Intent with regard to Plot Nos.
290M, 301M, 303M, 304M, 310M, 311M,
314M area 12.512 hectares has been
forfeited in favour of the State.

3. The facts of the case briefly
stated are that the petitioner participated in
the bidding for grant of mining lease of
5 All. M/S Deep Builders & Anr. Vs. State of U.P. & Ors.
2387
ordinary sand for a period of five years over
plots situated in Village Pachayra, Tehsil
Loni, District Ghaziabad having a total area
of 12.512 hectares. The auction was for a
mining of annual quantity of 2,50,240 cubic
meters of sand.

4. Since the bid of the petitioner
was the highest, a Letter of Intent was
issued in its favour on 31.10.2017. The
petitioner thereafter deposited 25% of the
bid amount as security and an equal amount
as the first instalment of royalty in
accordance with Rule 28(2)(i) of the U.P.
Minor Minerals (Concession) Rules, 1963.

5. The Letter of Intent was
cancelled on 28.01.2019. However, no
order was passed for refund of the security
amount or the first instalment forcing the
petitioner to approach this Court by means
of Writ - C No.19354 of 2021.

6. During the pendency of the said
writ petition, the order dated 28.08.2021
was passed. The petitioner thereafter
withdrew his earlier Writ - C No.19354 of
2021 and the instant writ petition is being
filed challenging the order of the District
Magistrate dated 28.08.2021, whereby the
security and first instalment towards
royalty has been forfeited in favour of the
State.

7. The contention of learned
counsel for the petitioner primarily is that
there exists no power with the respondents
to forfeit the security deposit or the first
instalment deposited by him, once the
Letter of Intent has been cancelled. The
impugned order therefore, is without any
sanction of law and is liable to be quashed.
The amount deposited by the petitioner is
liable to be refunded along with interest,
thereon.
8. Elaborating further, it has been
submitted that at the time, the Letter of
Intent was issued in favour of the petitioner,
the U.P. Minor Minerals (Concession)
Rules, 2017 as amended by the 43rd
Amendment, therein, were in force.

9. On the date, the Letter of Intent
was cancelled namely 28.01.2019, it is the
44th Amendment Rules, which were
operational. Neither the 43rd nor the 44th
Amendment Rules contain any provision
for forfeiture of the security deposit and/or
the royalty paid by the petitioner on
cancellation of the Letter of Intent. He has
reiterated that after issuance of the Letter of
Intent, a mining plan was submitted by the
petitioner within the time prescribed for the
same. This mining plan was also granted
approval by the respondents. Thereafter, the
petitioner
applied
for
environmental
clearance and before the same could be
granted, the Letter of Intent has been
cancelled. No order for forfeiture was
passed at the time of cancellation of the
Letter of Intent and this order has been
passed after the petitioner had preferred a
revision to the State Government,
wherein the matter was remitted back to
the third respondent to pass appropriate
orders on the prayer of the petitioner for
refund for security deposit and also the
royalty deposited by him. However, no
order was passed and, therefore, the
petitioner approach this Court by means
of Writ - C No.19354 of 2021 and
during the pendency of this writ
petition, the impugned order has been
passed.

10. He has also submitted that the
order of forfeiture if at all can only be
passed at the time of the order passed for
cancelling the Letter of Intent. This cannot
be done subsequently.
2388 INDIAN LAW REPORTS ALLAHABAD SERIES
11. Learned counsel for the
petitioner has placed reliance upon various
provisions of law during arguments.

12. The first provision placed by
learned counsel for the petitioner is Rule 29
of the U.P. Minor Minerals (Concession)
(Forty Third Amendment) Rules, 2017 to
submit that forfeiture of security deposit is
provided where lease deed is not executed
within three months due to a fault on the
part of the Lease holder. In the case at hand
no lease deed was ever executed. Hence this
provision is not at all attracted. Rule 29(1)
thereof reads as follows:-

"29. Execution of lease deed (1)
The
successful
bidder/tenderer
after
receiving letter of intent of concerned etender/e-auction/e-tender cum c-auction
shall produce, approved Mining Plan and
Clean. Environment Certificate prescribed
as per rule, and a lease deed concerning the
same will be executed in form MM-6 or in
similar format. The registration of the said
executed lease deed will be registered
within three months period. The period of
lease will be counted from the date of
execution of the concerned lease deed. If
due to fault on the part of lease holder,
registration of the said executed lease deed
is not registered within three months, then
the said lease deed will be treated as null
and void and the amount of security will be
seized by the District Magistrate."

13. Rule 34(4), non compliance
whereof is the basis of the impugned order
reads as follows:-

"(4) Mining operations shall in
respect of all minor mineral be undertaken
in accordance with the mining plan,
detailing, yearly development schemes,
aspect of reclamation and rehabilitation of
mined out areas including progressive mine
closure scheme duly approved by the
Director:
Provided that the lessee shall start
the mining operation after obtaining
environmental clearance if required under
the provisions of Environment Impact
Assessment Notification, dated September
14, 2006 issued by the Ministry of
Environment, Forest and Calamite change
Government of India as amended from time
to time:
Provided
further
that
an
application seeking prior environmental
clearance in all cases shall be made by the
project proponent or end user agency as the
case may be, in as provided in paragraph6 of the Environment Impact Assessment
Notification, dated September 14, 2006 as
amended from time to time."

14. Relying upon the provisions
quoted above, he has submitted that the
proviso to Rule 34(4) requires a lessee to
start mining operations only after obtaining
environmental clearance and that the
proviso casts a duty upon the lessee or the
proponent to apply for environmental
clearance.

15. Rule 34(5) provides that a
mining lease shall be executed only after
environmental clearance has been obtained.

16. Rule 34 of the Uttar Pradesh
Minor Minerals (Concession) (Forty Fourth
Amendment)
Rules,
2017
reads
as
follows:-

"34. (1) The 'Selected Applicant'
before the execution of mining lease deed
under the provisions of Chapters II, IV and
IX or issuing a mining permit under
Chapter VI of these rules, shall get
prepared a mining plan by the person,
5 All. M/S Deep Builders & Anr. Vs. State of U.P. & Ors.
2389
recognized and registered by the Director,
having the qualification and experience
namely:-
(i) a degree in Mining Engineering
or post-graduate degree in Geology
granted by university established or
incorporated by or under Central Act or a
Provincial Act or a State Act, including any
institution recognized by the University
Grants Commission established under
section 4 of the University Grants
Commission Act, 1956; and
(ii) professional experience of 05
years of working in a supervisory capacity
in the field of mining after obtaining the
degree.
(2) The selected applicant of etender/ bidder of e-auction shall submit the
mining plan for approval to the Director,
who may within thirty days from the date of
receipt of mining plan approve, modify or
reject it positively.
(3) The mining plan once approved
shall be valid for entire duration of the
mining lease/license or for five years
whichever is earlier. If the lease period is
more than five years then in that case the
lease holder will resubmit mining plan
before the Director, Geology and Mining,
Uttar
Pradesh.
(4) Mining operations shall in respect of all
minor
mineral
be
undertaken
in
accordance with the mining plan, detailing,
yearly development schemes, aspect of
reclamation and rehabilitation of mined out
areas including progressive mine closure
scheme duly approved by the Director:
Provided that the lessee shall start the
mining
operation
after
obtaining
environmental clearance if required under
the provisions of Environment Impact
Assessment Notification, dated September
14, 2006 issued by the Ministry of
Environment, Forest and Calamite change
Government of India as amended from time
to time : Provided further that an
application seeking prior environmental
clearance in all cases shall be made by the
project proponent or end-user agency as
the case may be, in as provided in
Paragraph 06 of the Environment Impact
Assessment Notification, dated September
14, 2006 as amended from time to time."

17. He has therefore, submitted
that the relevant Rule 34 was identical in
both the 43rd and 44th Amendment, Rules.

18. The U.P. Minor Minerals
(Concession) (Forty Seven Amendment)
Rules
2019
came
into
force
from
13.08.2019. Rule 34, therein reads as
follows:-

"34
Mining
operations
to
commence within six months -
(1) The 'Selected Applicant' before
the execution of mining lease deed under
the provision of chapter II, IV and IX or
issuing a mining permit under chapter VI of
these rules, shall get prepared a mining
plan by the person, recognized and
registered by the Director, having the
qualification and experience namely:-
(i) a degree in Mining Engineering
or post-graduate degree in Geology
granted by university established or
incorporated by or under Central Act or a
Provincial Act or a State Act, including any
institution recognized by the University
Grants Commission established under
section 4 of the University Grants
Commission Act, 1956; and
(ii) Professional Experience of 05
years of working in a Supervisory Capacity
in the field of mining after obtaining the
degree.
(2) The Selected applicant shall,
within one month of issuance of letter of
intent, submit the mining plan for approval
2390 INDIAN LAW REPORTS ALLAHABAD SERIES
to the Officer authorized by notification in
this behalf by the State Government, who
may within thirty days from the date of
receipt of mining plan approve, modify or
reject it positively. The project proponent
shall, within one month of approval of
mining plan, submit the application for
grant of Environment Clearance to the
competent authority.
(3) The mining plan once approved
shall be valid for entire duration of the
mining lease/permit or for five years
whichever is earlier. If the lease period is
more than five years, then in that case the
lease holder will resubmit mining plan
before
the
Officer
authorized
by
notification in this behalf by the State
Government.
(4) Mining operations shall in
respect of all minor mineral be undertaken
in accordance with the mining plan,
detailing yearly development schemes,
aspect of reclamation and rehabilitation of
mined out areas including progressive mine
closure scheme duly approved by the
Officer authorized by notification in this
behalf by the State Government.
Provided that the lessee shall start
the mining operation after obtaining
environmental clearance if required under
the provisions of Environment Impact
Assessment Notification, dated September
14, 2006 issued by the Ministry of
Environment, Forest and climate change,
Government of India as amended from time
to time. During the process of grant of
Environment clearance, the proponent
shall be bound to complete all desired
formalities to resolve the objections raised
by the competent authority within the
required time frame.
Provided
further
that
an
application seeking prior environmental
clearance in all cases shall be made by the
project proponent or end-user agency as
the case may be, in as provided in
Paragraph 06 of' the Environment Impact
Assessment Notification, dated September
14, 2006 as Amended from time to time.
(5) The mining lease deed will be
executed only after approval of mining plan
by the Officer authorized by notification in
this behalf by the State Government and
within one month from the date of issuance
of environment clearance certificate in
favour of the proponent. Mining operation
shall commence, immediately for the lessee
of river bed mineral within 03 (three)
months from the date of the execution of the
lease deed by the lessee of other minor
minerals and the lessee shall thereafter
conduct such operations without deliberate
intermission in a proper, skillful in workman like manner.
(6) Financial assurance has to be
furnished by every lease holder. The
amount of financial assurance shall be
Rupees Twenty five thousand for insitu-rock
deposit and Rupees Fifteen thousand for
sand or morrum or bajari or boulder or any
of these in mixed state exclusively found in
the river bed mines per acres of the mining
lease area put to use for mining and allied
activities. However, the minimum amount of
financial assurance to be furnished in any
of the forms referred to in sub-rule (7) shall
be Rupees Two Lacs. For each category of
mines be respective of area."

19. It is submitted that not only are
the Rules of 2019 applicable because the
Letter of Intent in favour of the petitioner
stood cancelled on 28.01.2019, more than
six months prior to the enforcement of the
Forty Seven Amendment Rules.

20. Learned Standing Counsel has
submitted that the impugned order has been
passed for violation of Rule 34(5) of the
U.P. Minor Minerals (Concession) (Forty
5 All. Rajendar & Anr. Vs. State of U.P.
2391
Seven Amendment) Rule, 2019 but
has not been able to point out from the said
Rule, no power of the State Government to
either forfeit the security deposit or the first
instalment.

21. 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.

22. Under the circumstances
therefore, the impugned order cannot be
sustained and the petition deserves to be
allowed.

23. The deposit made by the
petitioner in the year 2017 as the Letter of
Intent was cancelled on 28.01.2019, 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. The
respondents instead of refunding this
amount have forfeited the same, wrongly
and illegally and in the absence of any
power to do so.

24. Under the circumstances, the
submission of learned counsel for the
petitioner, he is entitled to interest on this
delayed payment has substance.

Learned counsel for the petitioner
has placed reliance upon a judgment of the
Apex Court in Dharmendra Kumar Singh
vs. State of U.P. AIR 2020 SC 5360,
especially paragraph 43, therein, wherein in
similar circumstances 9% interest is
payable.

25. Accordingly, we allow the writ
petition and quash the impugned order
dated
28.08.2021
and
direct
the
respondents to refund the security deposit
and the first instalment of royalty deposited
by the petitioner within a period of three
weeks from today.

26.

This
refund
shall
be
accompanied with simple interest at the
rare of 9%, calculated from the date of
cancellation of the Letter of Intent till actual
payment is made.
----------
(2024) 5 ILRA 2391
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 03.05.2024

BEFORE

THE HON'BLE ARVIND SINGH SANGWAN, J.
THE HON'BLE RAM MANOHAR NARAYAN
MISHRA, J.

Capital Case No. 20 of 2021

Rajendar & Anr. ...Appellants
Versus
State of U.P. ...Respondent

Counsel for the Appellants:
Sri Aditya Gupta, Sri G.S. Chaturvedi (Sr.
Advocate)

Counsel for the Respondent:
A.G.A., Sri Kuldeep Johri, Sri Kuldeep Kumar
Dixit

(A) Criminal Law - Criminal Procedure
Code,1973 - Sections 161, 164, 173 (2),
207, 293, 311, 313, 315, 319, 354(3),
366(1), 374(2) & 415 - Indian Penal Code,
1860 - Sections 302, 307 & 34 - Conviction
and Sentenced - Complaint - FIR - offence of
Murdered of three minor daughters of informant
- were of six persons inflicting injuries using an
axe - Capital sentence - reference and jail
appeals - Appreciation of evidence - convicted
appellants on the account of enmity - they have
been held guilty under section 302/34 IPC - they
killed three minor daughters of informant - lapse
in investigation - trial court held that shoddy and