IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.5661 of 2010 1. Birendra Kumar Tiwari @ Virendra Kumar Tiwari S/O Sri Kailash Tiwary R/O Vill.- Panchayati Akhara, P.S. Kotwali, Distt.- Gaya. Versus 1. The State Of Bihar 2. The District Magistrate, Gaya 3. The Assistant Director, Mines, Gaya ------------------ For the petitioner : Mr. Sanjeev Kumar, Advocate For the Mines Department : Mr. V.M.K.Sinha, Special P.P. (Mines). --------------------- 6. 18.10.2011. Heard learned counsel appearing on behalf of the petitioner and the learned counsel appearing on behalf of the Mines Department. The petitioner is aggrieved by the order dated 1.12.2009 passed in Revision Case No.11 of 2009 passed by the Mines Commissioner, Bihar, Patna, whereby an amount of Rs.5,20,000/- has been forfeited in exercise of power vested under Rule 52(2) (iii) of the Bihar Minor Mineral Concession Rules, 1972 (hereinafter referred to as the ‘Rules’). Brief facts of the matter is that pursuant to an advertisement published for grant of stone mining lease in the district of Gaya, the petitioner filed his application and participated in the auction in relation to settlement of stone block no.3 situated on plot no.121 in the town and 2 district of Gaya measuring 2 acres. In terms of the stipulations as set out in the advertisement, the earnest money of Rs.28,600/- was deposited by the petitioner, being 2% of the reserve jama. The petitioner being declared the highest bidder of stone block no.3 was granted settlement against a bid of Rs.2.60 crores. The petitioner deposited his first instalment of Rs.5 lakh by draft no.094725 drawn on the Central Bank of India on 14.11.2007. However, thereafter due to financial stringency, the petitioner could not deposit the balance amount and following which, the lease was cancelled by order dated 28.3.2008 and the earnest money was forfeited. Copy of the order dated 28.3.2008 has been placed on the records of the proceedings at Annexure 3. On an application made by the petitioner for refund of the amount of the instalment of Rs.5 lakh, a case was registered giving rise to Revision Case No.11 of 2009 and the learned Commissioner, Mines, Bihar, Patna vide order passed on 1.12.2009 communicated vide memo no.2238 dated 2.12.2009, disposed of the same after forfeiting an amount of Rs.5,20,000/- being 2% of the bid amount of 2.60 crores and passed order for refund of the balance amount of Rs.8,600/- only. 3 It is pertinent to mention here that the total amount deposited by the petitioner was Rs. 5,28,600/- i.e. 2% of the minimum bid amount being Rs. 28,600/- and the first instalment of Rs.5 lakh and of which a sum of Rs.5,20,000/- was forfeited and the balance of Rs. 8,600/- was directed to be refunded. The order impugned has been passed by the learned Commissioner in exercise of the power vested under Rule 52 (2)(iii) of the rules. Learned counsel for the petitioner raises a very short question. It is submitted that the Rule no where empowers the respondents to forfeit any amount. It is submitted that the relevant provisions of the Rule 52(2)(iii) merely provides for deposit of 2% of the auction amount by way of security, to be adjusted against the last instalment and further provides for refund of security deposit to the unsuccessful bidders. Learned counsel thus submits that in absence of statutory provision enabling the respondent authorities to forfeit the security amount, the order impugned is contrary to the statutory provisions and thus unsustainable. Learned counsel, while referring to the statutory provisions of Rule 11B of the Rules further submits that whereas a specific provision 4 of forfeiture of security deposit has been provided in relation to grant of lease for sand areas, no such provision enables the statutory authority to order for forfeiture of security deposit, in so far as the stone blocks are concerned. He thus submits that in the circumstances and in absence of any enabling provision the statute, the impugned order can not be sustained. A counter affidavit and a supplementary counter affidavit has been filed on behalf of the respondent authorities of the Mining Department enclosing a copy of the advertisement and a perusal whereof further supports the contention advanced on behalf of the petitioner as even in the advertisement there is no such provision enabling the respondent authorities to forfeit the security amount in case of a bidder withdrawing from his settlement. Mr. V.M.K. Sinha, learned counsel appearing on behalf of the department of Mines, relying on the provisions of the Indian Contract Act, submits that the failure on the part of the petitioner to abide by the terms and conditions of the settlement, empowers the State Government to forfeit the security deposit and thus there is no infirmity in the order of the learned Commissioner in forfeiting 5 the deposits. Mr. Sinha next submits that the stipulation of Rule 52(2)(iii) of the Rules prescribing for adjustment of the security deposit towards the last instalment by itself conceives of a forfeiture in case of a bidder being a defaulter. He submits that the moment the bidder had defaulted in honoring the terms and conditions of the lease, he becomes a defaulter and in which circumstance, the security deposit would be forfeited by the respondents. Having heard learned counsel for the parties and after considering the materials available on the records of the proceedings as also the statutory provision of Rule 11B as well as Rule 52(2) (iii) of the Rules, it is manifest that whereas the legislature has been very specific in awarding forfeiture of security deposit in case of default by a settlee of sand area auction settlement, no such provision is available under the rules in so far as the stone block is concerned. Further, even the terms and conditions of the advertisement as enclosed by the respondents in the supplementary counter affidavit placed at Annexure-R/1 thereof, nowhere empowers the Mining Department to forfeit the security 6 deposits in case of the bidder resiling from the bid settlement. The law is well settled and unless there is any statutory provision providing for forfeiture or the terms and conditions of the settlement specifically provides for forfeiture of the security amount, no such order of forfeiture of security deposit can be passed by the authorities. A forfeiture of security deposit is a penal action and has to derive its source either from the statutory provisions or the terms and conditions of the advertisement or terms of settlement. Neither the impugned order nor the learned counsel for the respondents has been able to satisfy the Court as regarding the source of power in the statutory authority for directing such forfeiture. The reliance on rule 52(2)(iii) is completely misplaced as it nowhere empowers any such forfeiture. For the reasons aforesaid, the impugned order dated 1.12.2009 as contained in Annexure-1 to the extent it orders for forfeiture of security deposit of Rs. 5,20,000/-, cannot be sustained and the same is quashed and set aside. As a consequence, the petitioner shall be entitled to the refund thereof together with the amount of Rs. 8,600/- (if not already received) and which shall be refunded to 7 the petitioner within a period of three months from the date of receipt/production of a copy of this order. The writ petition is allowed. ahk (Jyoti Saran, J.)