Nishad Matsya Jeewee Sahkari Samiti Limited vs Distt. Magistrate and Another

A.N. Varma, J.—The petitioner is challenging an order passed by the District Magistrate, Fatehpur in the purported exercise of powers under Rule 14 of the U.P. Minor Mineral (Concession) Rules, 1963 directing the forfeiture of Rs. one lac deposited by the petitioner towards the grant of mining lease under Rule 4 of the aforesaid Rules. The contention is that under Rule 14 all that could be forfeited is the application fee and not the amount deposited by the grantee towards the mining lease.

It is alleged that in pursuance of the grant no lease was executed because of certain alleged failure on the part of the authorities. Nor did the petitioner excavate the sand. In the counter affidavit filed on behalf of the Respondents it is asserted that the lease was not executed because of the failure of the petitioner to supply general stamps of Rs. 9500/- and even if he did not carry out the mining operations the Respondents could not be blamed for it Consequently the amount of Rs. one lac deposited by the petitioner was liable to be forfeited under Rule 14.

The fact that the petitioner did not operate the mine seems to be established beyond doubt. The question is: what is effect of his failure to execute the lease,

Slaving beard the learned Counsel for the parties we are of the opinion that the petitioner is entitled to succeed.

Rule 14 of the aforesaid Rules provides:

Lease deed to be executed within three months-(1) Where an order has been made for the grant of a mining lease, a lease deed in Form MM-3 or in a form as near thereto as the circumstances of each case may require, shall be executed within three months of the communication of the said order or within such further period as the State Government may allow in this behalf. if no such deed is executed within the aforesaid period due to any default on the part of the applicant-the State Government may revoke the order granting the lease and in that event the application fee shall be forfeited to the State Government.

(2) The date of the commencement of a mining lease shall be the date on which the deed is executed under Sub-rule (1).

(Emphasis added)

Under Clause (a) of Rule 6, every application for the grant of mining lease has to be accompanied by a fee of Rs. 150/-.

Apart from the above statutory Rules, learned Standing Counsel did not point out any other provision under which the State Government might have been empowered to forfeit the deposit of the money deposited by the grantee of the lease simply on the ground that the grantee had failed to execute the lease. It will, therefore, be seen that in so far as the statute goes, there is no provision for forfeiture of the money deposited by the grantee towards the lease before the execution of the lease merely on the ground that the grantee has not executed the lease. Besides the statutory provisions, we have not been pointed out any stipulation either in the grant or in the proposed lease or any other agreement under which on the breach of the conditions thereof, the Respondents would be entitled to forfeit the lease, Blackstone defines the term ''forfeiture'' as:

a punishment annexed by law to some illegal act or negligence, in the owner of lands, tenements, or hereditaments, whereby he loses all his interest, therein and they go to the party injured, as a recompense for the wrong which either he alone, or the public together with himself, had sustained, e. g. alienation in mortmain, disclaimer by tenant of lord''s title, breach of copyhold customs, breach of covenants in a lease.

Forfeiture, in our opinion, is essentially a penalty or punishment for breach of any statute or engagement or stipulation in any lease, grant or a contract and consequently, it must be construed strictly. The breach must be of some express term in the grant or lease or some other statutory stipulation. The clause of forfeiture cannot hence be invoiced except for the breach of a specific term.

So construed, the impugned order directing forfeiture of the amount deposited by the petitioner towards the grant is clearly unsustainable in law.

In the result, the petition succeeds and is allowed. The impugned order dated 16-10-86 (Annexure 6) directing forfeiture of the amount of Rs. one lac deposited by the petitioner and recovery of the remaining amount of Rs. one lac is quashed except as regards the application fee deposited by the petitioner. The District Magistrate is directed to refund the amount deposited by the petitioner towards the lease within a month from the date on which a certified copy of this order is presented before him.