Patna High Court
Batsha KhatoonversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
- Bench
- SANDEEP KUMAR
Holding
The order dated 20‑Nov‑2024 is quashed and the petitioners are entitled to a pro‑rata refund of the bid amount for 07‑Feb‑2019 to 08‑Jun‑2019 with 6% simple interest.
Summary
The petitioners, legal heirs of Md. Israil who had been awarded a sand‑ghat settlement in 2015, sought a refund of the bid amount for the period February 7 2019 to June 8 2019 when the settlement was cancelled by the Collector of Kishanganj but later set aside by the Mines Commissioner and restored. The petitioners argued that they were unlawfully deprived of mining rights and were forced to pay royalty under protest. The State authorities rejected the refund claim, relying on contractual clauses and the absence of a statutory provision for remission. The Court held that the impugned order of November 2024 was vitiated because it attempted to override the revisional order and ignored the fact that the lease was cancelled without legal basis. Consequently, the Court quashed the order, directed a pro‑rata refund of the bid amount for the disabled period with 6% simple interest, and ordered the respondents to compute the amount within eight weeks.
Issues considered
- The cancellation order, later set aside, entitles the settlee to a refund for the period of legal disability.
- Whether royalty/bid amount is payable during the period when the lease was cancelled but subsequently restored.
- Whether a later administrative order can override an earlier revisional order of the Mines Commissioner.
- Whether the writ jurisdiction extends to granting monetary relief such as refund and interest.
Legislation cited
- Bihar Minor Mineral Concession Rules, 1972 — s. 18-A, 21(k), 24, 40
- Environment (Protection) Act, 1986
Subjects
- mining lease
- refund
- royalty
- cancellation order
- revisional authority
- unjust enrichment
- pro‑rata payment
- writ jurisdiction
- sand ghat
- Bihar Minor Mineral Concession Rules
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.4167 of 2025
======================================================
1. Batsha Khatoon Wife of Late Md Israil Resident of Village- Tupamari, Ward
No. 4, Post Office- Belwa, Police Station-Kishanganj, District-Kishanganj.
2. Shahnaj Begum Daughter of Late Md. Israil Resident of Village- Tupamari,
Ward No. 4, Post Office- Belwa, Police Station-Kishanganj, District-
Kishanganj.
3. Gauhar Taj Begum Daughter of Late. Md. Israil Resident of Village-
Tupamari, Ward No. 4, Post Office- Belwa, Police Station-Kishanganj,
District-Kishanganj.
4. Md. Anwarul Haque Son of Late. Md. Israil Resident of Village- Tupamari,
Ward No. 4, Post Office- Belwa, Police Station-Kishanganj, District-
Kishanganj.
5. Ashraful Haque Son of Late Md. Israil Resident of Village- Tupamari, Ward
No. 4, Post Office- Belwa, Police Station-Kishanganj, District-Kishanganj.
... ... Petitioners
Versus
1. The State of Bihar through the Principal Secretary, Department of Mines and
Geology, Government of Bihar, Patna.
2. The Principal Secretary-Mines Commissioner, Department of Mines and
Geology, Government of Bihar, Patna.
3. The Director, Department of Mines and Geology, Government of Bihar,
Patna.
4. The Collector, Kishanganj.
5. Mines Inspector-Cum-Competent Officer, Kishanganj.
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Aastha Ananya, Advocate
For the State : Mr. Kumar Manish, Standing Counsel (05)
Mr. Arun Kumar Prasad, AC to SC-05
For the Mines Dept. : Mr. Naresh Dikshit, Spl. P.P.
Mr. Brij Bihari Tiwari, Advocate
Ms. Shruti Singh, Advocate
Mr. Utsav Anand, Advocate
Mr. Utkarsh Pathak, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE SANDEEP KUMAR
C.A.V. JUDGMENT
Date : 16-04-2026
By way of this writ petition, the petitioners have
prayed for the following reliefs:-
“i. For issuance of a writ, order or direction in the
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
2/45
nature of certiorari to quash the order as
contained in memo no.4878 dated 20.11.2024
passed in Miscellaneous Case No. 04 of 2024 by
the respondent no.3 whereby the representation
dated 05.08.2024 filed by the petitioners for
refund of the amount of Rs.1,26,14,190/- with
interest has been rejected on non est ground
which order is arbitrary, illegal and
unsustainable.
ii. For issuance of a writ, order or direction in the
nature of mandamus commanding the
respondents to hold and declare that after the
setting aside of the order as contained in memo
no.4878 dated 20.11.2024 passed in
Miscellaneous Case No.04 of 2024 by the
respondent no. 3, the petitioners are entitled for
refund on pro rata basis the bid amount for the
period 07.02.2019 to 08.06.2019 i.e. the period
in which the petitioner was precluded from
carrying out the mining activities on account of
unwarranted, invalid and illegal order of
cancellation of settlement which was
subsequently set aside on merits and thus, the
petitioners are entitled for a refund of Rs.
1,26,14,190/- along with 12% interest from the
date the husband of the petitioner no.1 was
forced to deposit till the date of its realization as
the respondent authority has extracted the
aforesaid amount under threat and duress and
without any justifiable reasons and therefore, a
direction may be issued to the respondent
authority to refund the amount of Rs.
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
3/45
1,26,14,190/- with 12% interest from the year
2019 till the date of realization.”
2. One Md. Israil had participated in a public
auction held on 13.01.2015 for the settlement of entire sand
ghat (balu ghat) for a period of five years, in the district of
Kishanganj, and had emerged successful as the highest bidder.
Accordingly, the sand ghat in the district of Kishanganj was
settled in his favour. Thereafter, upon deposit of the requisite
amount, the settlement deed was executed.
3. The present petitioners are the legal heirs of
aforesaid Md. Israil - sand ghat settlee, who had passed away on
19.08.2022. Petitioner no. 1 is the widow, and the petitioner nos.
2 to 5 are the sons and daughters of the aforesaid Md. Israil-
sand ghat settlee respectively.
4. The nucleus of the present lis is whether, in
the facts of the present case, the sand ghat settlee was entitled
for refund for a period of legal disability caused exclusively by
a quasi-judicial cancellation order passed by the Collector,
Kishanganj, that was later set aside by the revisional authority-
Mines Commissioner and remanded back for fresh
consideration and subsequent thereto, the lease of the settlee
was restored. Further whether the State can continue to fasten
monetary burden for the very period during which the settlee
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
4/45
was legally disabled from operating the sand ghat by an order
which was subsequently set aside.
5. The brief facts relevant for the present
purpose is that based on complaints received, the Collector,
Kishanganj, constituted an enquiry team to inquire into the
allegations against the sand ghat settlee, i.e., the husband of
petitioner no.1 (hereinafter referred as ‘sand ghat settlee’).
Pursuant thereto, the enquiry committee conducted joint
inspection of five sand ghats and submitted a joint enquiry
report before the Sub-Divisional Officer, Kishanganj, wherein it
was found that there was deficiency of 41,99,050 CFT of sand,
during the physical verification, as compared to the figures
reported as ‘stocked’ by the sand ghat settlee, leading to the
imputation that he had inflated the stock figures to engage in
illegal mining during the prohibited period from the months of
July to September 2018, in alleged violation of Rules 21(k), 24
and 40 of the Bihar Minor Mineral Concession Rules as well as
the provisions of the Environment (Protection) Act. The
allegation against the sand ghat settlee was that 41,99,050 CFT
of sand remained unaccounted and that he had shown inflated
figures so that in the prohibited months he could carry out
illegal mining.
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
5/45
6. Based on the aforesaid report, a show cause
notice dated 21.08.2018, was issued by the Collector
Kishanganj, calling upon the sand ghat settlee to submit his
explanation within 07 days. Responding to the aforesaid show-
cause, the sand ghat settlee submitted his reply on 28.08.2018
stating therein that he had never furnished inflated figures and
that during the relevant period i.e. from 05.07.2018 to
07.07.2018 there was a flash flood, due to which the river got
spread leading to massive depletion of sand stock in the area.
The sand ghat settlee had also stated in the reply to the show-
cause that the figures reported by him were after proper
measurement. In order to fortify the said measurement figures, it
was stated that the Mines Inspector, Kishanganj on 03.07.2018
had physically inspected the sand ghat, to verify the quantity of
sand stocked at the ghat and upon physical measurement had
assessed the sand stocked and stored at the sand ghats within
300 feet as 48,56,600 CFT. In the aforesaid reply, the sand ghat
setlee had also contended that flood and overflowing of water in
the river had hit Kishanganj town between 05.07.2018 and
07.07.2018, resulting in massive depletion of sand stock and this
fact was duly informed by the sand ghat settlee vide letter dated
06.07.2018 to the District Mining Officer, Kishanganj. The
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
6/45
Collector, Kishanganj thereafter constituted another four
member enquiry team for inspection of two sand ghats and the
inspection/ raid was conducted by the team on 04.12.2018 and
on the very same date i.e., 04.12.2018, a joint report was
submitted wherein certain irregularities were noticed.
7. Based on the aforesaid enquiry report dated
04.12.2018, the Collector, Kishanganj issued another show
cause of even date wherein altogether eleven charges were
levelled against the sand ghat settlee and he was directed to
submit his reply within 24 hours.
8. The aforesaid show cause was assailed
before this Court by way of C.W.J.C. No. 24330 of 2018 titled
as ‘Md. Israil vs. State of Bihar & Ors.’ and this Court vide
order dated 21.12.2018 directed the sand ghat settlee to submit
his reply on or before 15.01.2019 and further restrained the
Collector, Kishanganj from taking any coercive action during
the interim period. The aforesaid order dated 21.12.2018 reads
as under:-
“Heard learned counsel for the
petitioner and Special Public Prosecutor
(Mines).
This writ petition has been filed
for quashing the show cause notice dated
4.12.2018 issued by Memo No. 2853/C
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
7/45
Kishanganj by the Collector, Kishanganj, on the
ground that same is wholly without jurisdiction.
The show cause notice does not meet statutory
requirement.
The Special P.P. (Mines) submits
that till date the Collector has not passed final
order in the matter. Therefore, at this stage, this
writ application would be pre-mature. He
further submits that petitioner has not filed
show cause before the competent authority in
terms of show cause notice dated 4.12.2018 and
has moved this Hon’ble Court for quashing the
show cause notice.
Counsel for the petitioner submits
that in the show cause notice, he has been given
only 24 hours time to file show cause which is
not justified. He further submits that petitioner
vide Annexure-14 has made request with the
authority concerned to grant at least one week
time to file show cause.
In such circumstances, this writ
petition is disposed off with direction to the
competent authority to grant time to the
petitioner till 15th January, 2019 to submit show
cause before him in terms of show cause notice
dated 4.12.2018 (Annexure- 12). After receipt of
show cause from the petitioner, the competent
authority i.e. District Magistrate, Kishanganj,
will dispose off the matter and pass appropriate
order within one month of filing show cause by
the petitioner.
Petitioner is given liberty to take
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
8/45
recourse to the remedy available in law, in the
event he will be aggrieved by the order passed
by the competent authority.
In the meantime, the District
Magistrate and Collector Kishanganj, will not
take any coercive steps against the petitioner till
15th January, 2019.”
9. In compliance of the afore-quoted order, the
sand ghat settlee filed his detailed reply on 15.01.2019 and
thereafter, the Collector, Kishanganj registered Misc. Case No.
01 of 2018 (Mines). In the aforesaid Misc. Case, the Collector,
Kishanganj cancelled the settlement of the sand ghat allotted to
the sand ghat settlee vide order dated 29.01.2019, which was
assailed by preferring a statutory revision before the Mines
Commissioner and the aforesaid revision application preferred
by the sand ghat settlee was registered as Revision Case No.04
of 2019. The Mines Commissioner after duly issuing notice to
the Collector and hearing the Mines Inspector as well as the
revisionist i.e. sand ghat settlee, had vide order dated
03.05.2019 remitted the matter back to the Collector,
Kishanganj for fresh consideration after setting aside the order
dated 29.01.2019. The matter was remitted with respect to the
alleged discrepancy in the quantity of sand, as no finding had
been recorded on the specific plea raised by the settlee that the
sand had been washed away due to flood and overflowing water.
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
9/45
10. Upon remand, the Collector, Kishanganj
again heard both the parties and also called for a report from the
Executive Engineer, Flood Control and Drainage System,
Kishanganj. Pursuant thereto, the aforesaid Executive Engineer
submitted his report on 29.05.2019 stating therein that due to
excessive rainfall, the water levels in rivers Koshi, Mahananda,
Mechi and Parwan were above the danger mark in the district of
Kishanganj on 05.07.2018. The Collector, Kishanganj after
considering the materials on record vide order dated 08.06.2019
restored the settlement of the sand ghat settlee.
11. After restoration of the sand ghat in favour
of sand ghat settlee, the respondent Mining Department issued
letter directing the sand ghat settlee to deposit the second
instalment of royalty for the calender year 2019 along with
interest. In response to the aforesaid letter, the sand ghat settlee
submitted a representation dated 04.07.2019 before the
Collector, Kishanganj, seeking remission on a pro-rata basis
during the period in which he was precluded from carrying out
mining operation and consequently, he further requested that the
amount already paid be adjusted against the subsequent
instalments. The Collector, Kishanganj sought an opinion from
the Director, Mines on the point whether the sand ghat settlee is
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
10/45
entitled for pro-rata exemption from payment of bid amount for
the period he was restrained from carrying out mining
operations on account of cancellation of settlement. The
Assistant Director replied vide letter dated 02.08.2019 that since
the cancellation order dated 19.01.2019 was passed for carrying
mining operation in violation of Rules, the sand ghat settlee was
not entitles for exemption. Thereafter the Collector, Kishanganj
directed the sand ghat settlee to deposit the second instalment of
royalty for the calender year 2019. Aggrieved by the inaction on
the representation and the persistent demand for second
instalment of royalty for the calender year 2019, the sand ghat
settlee preferred a writ petition vide C.W.J.C. No.17138 of 2019
titled as ‘Batsha Khatoon & Ors. vs. The State of Bihar &
Ors.’.
12. It is the case of the petitioners that
subsequent to the filing of the earlier writ petition in C.W.J.C.
No.17138 of 2019, the Assistant Director, Department of Mines,
Purnea Circle issued a letter dated 06.09.2019 directing the
Mines Inspector to institute a criminal case against the sand
ghat settlee, in the event of failure to comply with the directions
to deposit second instalment of royalty for the calender year
2019. The sand ghat settlee had deposited the entire pending
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
11/45
amount, under protest and without prejudice to his rights. The
sand ghat settlee passed away on 19.08.2022 and the present
petitioners were substituted in his place in the earlier writ
petition being C.W.J.C. No. 17138 of 2019, as his legal heirs.
The aforesaid writ petition was disposed of vide order dated
11.07.2014. The relevant portion of the aforesaid order reads as
under:
“..................
3. The limited case of the petitioners is that
the mining of the ghats in the District of
Kishanganj was settled for a period of
five years (16.01.2015 to 31.12.2019), he
being the highest bidder.
4. Learned counsel submits that he
continued with his work with full
satisfaction of respondents and was
diligent in making payment in the
installments.
5. It is his case that on the basis of certain
allegation, the respondent no. 3, the
Collector, Kishanganj passed an order on
29.01.2019 in Misc. Case No. 01 of 2018
(State vs. Md. Israil) which was
communicated vide memo no. 204 dated
02.02.2019 by which the lease deed was
cancelled (Annexure- 14 to the writ
petition).
6. Learned counsel for the petitioners
submit that a revision was preferred
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
12/45
against the said order before the Mines
Commissioner, Bihar vide Revision Case
No. 04 of 2019 (Md. Israil vs. Collector,
Kishanganj and Ors.) which came to be
disposed of on 03.05.2019 and the Mines
Commissioner was pleased to set aside
the order dated 29.01.2019 passed by the
Collector, Kishanganj remanding it back
for a fresh decision in the light of Rule
24(3) of the Bihar Minor and Mineral
Concession Rules, 1972 (Annexure-15 to
the writ petition).
7. Learned counsel submits that the
Collector, Kishanganj thereafter took up
the matter, heard the parties and vide an
order dated 08.06.2019, the lease deed
was restored to him. (Annexure-16 to the
writ petition).
8. He submits that close on the heels, came
the demand letter No. 596 dated
15.06.2019 as also 660 dated 12.07.2019
issued by the Mines Inspector-cum-
Competent Authority, Kishanganj
directing him to pay the second
installment for a financial year, 2019
with interest. He submits that admittedly,
between February, 2019 (when the lease
deed was cancelled) to 08.06.2019, when
it was restored, there was no lease
between the parties and as such, the
Mines Inspector could not have
demanded the amount for the said
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
13/45
period.
9. He submits that aggrieved, a petition was
preferred by the petitioner before the
Collector, Kishanganj on 04.07.2019
(Annexure-17 to the writ petition) but no
decision was taken. It was later
forwarded to the Mines Department and
the Joint Director (Headquarter) rejected
the said representation vide order/memo
no. 2554 dated 02.08.2019 (Annexure-20
to the I.A. No. 01 of 2019).
10. Learned counsel submits that due to the
threat of the FIR, he deposited Rs. 55
lakhs on 19.11.2019 followed by another
Rs. 55 lakhs by way of challans on
21.11.2019 under protest which are part
of the Interlocutory application.
11. He submits that so far as the payment
part is concerned, there is no dispute
with the respondents. He submits that
when admittedly, he was out of lease for
four months, the petitioners have every
right to ask for the refund.
12. Though, the counter-affidavit on behalf
of respondent Nos. 3 and 4, the Collector
and the Mines Inspector- cum-Competent
Officer, Kishanganj respectively is/are on
record and learned counsel for the Mines
took this Court to paragraphs – 8 to 10
to support the rejection/demand, it
nowhere answers to the question put
forward by the petitioner as to whether
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
14/45
for the period, his lease deed was
cancelled, he is entitled to the refund or
not.
13. It seems, the respondents signed the
statement of facts without bothering to
think about the question that has been
raised in the writ petition and/or
whether it needs an answer or not.
14. In that background, it would be
appropriate that the Principal
Secretary-cum-Mines Commissioner,
Department of Mines in Geology, Bihar,
Patna (respondent no. 2) look into the
matter and pass an appropriate order.
15. Accordingly, ordered. The petitioner to
represent before the respondent No. 2,
The Principal Secretary-cum-Mines
Commissioner, Department of Mines and
Geology, Government of Bihar, Patna
with all the necessary documents in next
four weeks.
16. If he prefers the said petition within the
aforesaid period, the respondent No. 2,
The Principal Secretary-cum-Mines
Commissioner, Department of Mines and
Geology, Bihar, Patna shall take up the
matter and after hearing the parties
including the respondent Nos. 3 and 4, if
required, will pass the order within a
period of three months thereafter.
17. If the respondent No. 2, The Principal
Secretary-cum-Mines Commissioner,
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
15/45
Department of Mines and Geology,
Bihar, Patna comes to a conclusion that
the petitioner is entitled to the relief
sought for, the payment has to be made
within next four weeks of the passing of
the order.
18. It is made clear that the respondent No.
2, The Principal Secretary-cum-Mines
Commissioner, Department of Mines
and Geology, Bihar, Patna shall take an
independent decision without going into
the earlier order, if any passed by any
respondent authority/authorities.
19. The present writ petition stands disposed
of.”
13. Pursuant to the direction passed by the Co-
ordinate Bench of this Court in C.W.J.C. No. 17138 of 2019, the
present petitioners submitted a detailed representation dated
05.08.2024 claiming liability to pay only the proportionate
amount despite the truncated period and a consequent refund of
Rs. 1,26,14,190/- with interest. The aforesaid representation was
rejected by the respondent no. 3 vide impugned order dated
20.11.2024 passed in Misc. Case No. 04 of 2024, which has
been assailed in the present writ petition.
14. Learned counsel for the petitioner, at the
outset, submits that the sand ghat settlee, was proceeded against,
based on a complaint dated 30.09.2018 lodged by one Vijay
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
16/45
Kumar Singh, a reverse settlee whose settlement had earlier
been cancelled. In the aforesaid complaint, it was alleged that
the husband of the petitioner no.1 was using a poclain machine
for excavating sand. The learned counsel further submits that
the respondent Collector, Kishanganj has demonstrated mala
fide against the sand ghat settlee, which is illustrated by the very
fact that the inspection report was never served upon him and
the response to the second show cause was demanded within an
unreasonable period of 24 hours. It is submitted that, noticing
these factors, a Co-ordinate Bench of this Court had not only
permitted the sand ghat settlee to submit his response at a later
date but also restrained the respondent Collector, Kishanganj
from taking any coercive action.
15. Adverting to the revisional order dated
03.05.2019, the learned counsel for the petitioners submits that
the aforesaid order is a reasoned one where the Mines
Commissioner had noted that the then Collector, Kishanganj had
acted arbitrarily and that such cancellation could benefit
unscrupulous elements. Furthermore, the learned counsel
submits that the remand of the case was done after considering
the merits of the case and the subsequent order of the Collector,
Kishanganj restoring the settlement of the sand ghat settlee was
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
17/45
also done on merits as such the sand ghat settlee could not be
prejudiced, it is therefore the categorical submission of the
learned counsel for the petitioners that the original cancellation
order dated 29.01.2019 was not justified on facts or in law and
further that the allegations leading to the aforesaid cancellation
were factually unsustainable motivated by rival complaints and
based on conjecture and surmise. Furthermore, relying upon the
subsequent revisional order passed in Revision Case No. 04 of
2019 and the eventual restoration of the settlement of the sand
ghat vide order dated 08.06.2019, the learned counsel for the
petitioners submits that the original cancellation did not survive
quasi-judicial revisional scrutiny. It is the submission on behalf
of the petitioners that once the Mines Commissioner in
revisional proceedings had set aside the cancellation and
remitted the matter, and once the Collector, Kishanganj on
remand had restored the lease on 08.06.2019 after finding that
the stock-discrepancy allegation was without substance in light
of the flood explanation and related material, the foundation of
the earlier cancellation could not be sustained. Therefore, the
respondent authorities cannot, in a later proceeding, revert back
to the same allegations and treat the cancellation period as if it
were justified. It is the next submission of the learned counsel
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
18/45
for the petitioners that the Mines Commissioner in Revision
Case No. 04 of 2019 did not merely extend sympathy or public-
interest indulgence. Rather, the Mines Commissioner found that
the allegations in the second show-cause to be unsupported by
irrefutable evidence and were based on conjecture and surmise.
The learned Counsel for the petitioners place heavy reliance on
the passage from the revisional order warning the Collector not
to rush to cancel leases on frivolous grounds or for minor
breaches and noting that parties defeated in auction often create
mischief through frivolous complaints.
16. It is categorically submitted by the learned
Counsel for the petitioners that royalty/bid amount is directly
relatable to the right to win, extract and sell minerals. It
presupposes a subsisting settlement. Therefore, once the
settlement was cancelled and the order of cancellation had been
communicated, there was no operative lease during the relevant
period between 07.02.2019 and 08.06.2019. It is submitted that
during that period, the settlee could not lawfully excavate,
transport, or sell sand, for reasons not attributable to him and
accordingly, the respondent authorities had no authority to
demand or retain the proportionate bid. It is the next submission
that the payment of the second instalment for the year 2019 was
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
19/45
made by the petitioner under threat of criminal case and under
protest. It is further submitted that once the sand ghat settlee
was precluded from conducting mining for no fault of his own,
no royalty obligation for the specific period could arise and the
respondents could not have saddled the sand ghat settlee with
monetary obligations.
17. The learned Counsel for the petitioners
adverting to the tender document, particularly clause 19(xii)
thereunder, submits that the respondent no. 03 had relied on the
aforesaid clause as one of the grounds to deny refund to the
petitioners, however it is the submission of the learned Counsel
for the petitioners that clause 19(xii) deals with operational
difficulties despite a subsisting lease, such as approach-road
obstruction, demarcation issues, non-availability of minerals, or
other difficulty in excavation, and merely says that in such
circumstances the State will not reimburse or make good the
loss suffered. It is emphasized by the learned Counsel for the
petitioners that the aforesaid provision, does not apply where the
lease itself stands cancelled and the settlee is deprived of the
right to mine altogether. Therefore, the reliance placed on
Clause 19(xii) in the impugned order is wholly misplaced and
unsustainable since the aforesaid clause 19(xii) pre-supposes the
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
20/45
subsistence of a valid and operative lease and only contemplates
inability to carry out mining due to operational difficulties.
18. Lastly, the learned counsel for the petitioners
has submitted that in the facts of the present case the petitioners
being the legal heirs of the sand ghat settlee deserve a refund of
the bid amount on a pro rata basis.
19. Per contra, the learned counsel for the
answering respondent nos. 1 to 3, at the outset submits that the
order passed by the then Collector, Kishanganj vide order dated
29.01.2019, is not arbitrary and the action against the sand ghat
settlee was initiated after having received complaints of illegal
mining. Further, the learned counsel has adverted to the orders
dated 03.05.2019 and 08.06.2019 passed by the Revisional
Authority and the Collector, Kishanganj upon remand,
respectively, and submitted that neither of the aforesaid orders
exempted the sand ghat settlee from paying the royalty during
the intervening period during which the settlement of the settlee
was cancelled.
20. It is next submitted on behalf of the
answering respondent nos. 1 to 3, that no royalty exemption
could be granted in absence of any express governing rules or
contractual stipulation. It is submitted that refund of royalty can
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
21/45
not be granted on purely equitable considerations in absence of
governing statutory rules. In support of his submission the
learned counsel for the answering respondent nos. 1 to 3 has
relied upon a decision of the Hon’ble Supreme Court in the case
of Rajasthan State Industrial Development Corporation vs.
Diamond & Gem Development Corporation Ltd. reported as
(2013) 5 SCC 470.
21. It is the next submission of the learned
counsel for the answering respondent nos. 1 to 3 that, levy of
royalty for the settlement period has never been declared illegal,
and until the levy itself is declared illegal, no refund could be
granted in favour of the settlee. The learned counsel for the
answering respondent nos. 1 to 3 has drawn strength from the
decision of the Hon’ble Supreme Court in the case of
Municipal Committee, Katra vs. Ashwani Kumar reported as
2024 SCC OnLine SC 840.
22. Lastly, the learned counsel for the answering
respondent nos. 1 to 3 has submitted that the prayer of the
present petitioners are purely monetary in nature and as such is
not amenable to writ jurisdiction. The learned counsel has relied
upon a decision of the Hon’ble Supreme Court in the case of
State of Bihar vs. Jain Plastics and Chemicals Ltd. reported as
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
22/45
(2002) 1 SCC 2016.
23. A counter affidavit has also been filed on
behalf of the respondent nos. 4 and 5. The learned counsel for
the respondent nos. 4 and 5 has supported the impugned order
by which the representation has been rejected and submitted that
in the facts of the case, the petitioners do not deserve any
indulgence from this Court.
24. I have considered the submissions of the
parties and perused the materials on record.
25. The sand ghat settlee was allotted the sand
ghat in the district of Kishanganj. The Collector, Kishanganj
received complaint against the sand ghat settlee and pursuant
thereto, an enquiry committee was constituted which submitted
its report, based on which, the Collector, issued a show-cause
notice to the sand ghat settlee, which was responded to by him.
Subsequently, the Collector, again re-constituted another
committee to conduct fresh inspection and thereafter, the said
committee submitted its report on the very same day noticing
certain discrepancies in the sand ghats. Pursuant thereto, another
show-cause notice was issued to the sand ghat settlee and
response was called within 24 hours. The aforesaid show-cause
notice was assailed before this Court in C.W.J.C. No. 24330 of
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
23/45
2018. A Co-ordinate Bench of this Court vide order dated
21.12.2018 had extended the time period for submission of the
response to the show-cause and further restrained the Collector,
Kishanganj from taking any coercive action against the sand
ghat settlee. Thereafter, a response was submitted by the sand
ghat settlee which prompted the Collector, Kishanganj to
register Miscellaneous Case No.01 of 2018 (Mines) and vide
order dated 29.01.2019 the settlement of the sand ghat settlee
was cancelled. Thereafter, the aforesaid order was assailed
before the Mines Commissioner in Revision, wherein the order
of the Collector dated 29.01.2019 was set aside and the matter
was remanded back to the Collector, Kishanganj for fresh
consideration. The Collector, Kishanganj after hearing the
matter afresh, restored the settlement.
26. Upon a perusal of the order of the Collector,
Kishanganj dated 08.06.2019 by which the settlement of the
sand ghat settlee was restored reveals that the Collector had
duly considered the submissions of the parties with respect to
flash flood in the district of Kishanganj during the relevant
period and other submissions on merits and thereafter, directed
for restoration of the settlement for the entire sand ghats in the
district of Kishanganj with certain directions.
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
24/45
27. In this backdrop, the nucleus of the present
case is that the sand ghat settlee was precluded from operating
the sand ghats which have been settled in his favour only on the
strength an order passed by the then Collector, Kishanganj
which was ultimately set aside and thereafter, the successor
Collector, Kishanganj, on remand, passed fresh order restoring
the settlement of the settlee. The impugned order dated
20.11.2024, by which the representation filed by the petitioners
came to be rejected by holding that the then Mines
Commissioner had adopted a lenient view in the matter and
therefore, the petitioners are not entitled for any refund is not
sustainable since the respondent no 03 while passing the
impugned order dated 20.112024 can not supplement or
interpret the order passed by the then Mines Commissioner.
Further from the perusal of the impugned order dated
20.11.2024, it appears that the respondent authority has
subscribed to the assertion that the sand ghat settlee had
contravened the mining rules and that further he was in fault due
to which his settlement came to be cancelled, however, once the
order of cancellation came to be set aside on merits and the
restoration was ordered by the successor Collector, Kishanganj,
the aforesaid assertion could not have been a relevant factor for
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
25/45
considering the prayer for refund. Moreover, this Court has
noted that, the Co-ordinate bench of this Court vide order dated
11.07.2024 passed in CWJC No. 17138 of 2019, had
categorically directed the Principal Secretary-cum-Mines
Commissioner to take an independent decision in the matter,
however the impugned order has been passed by the respondent
no.3 (Director, Department of Mines & Geology).
28. It is a settled proposition of law that an order
passed by a judicial or quasi judicial authority must stand or fall
based on the reasons contained in it. The order passed by the
Mines Commissioner dated 03.05.2019 cannot be recast and
coloured as having been passed with a ‘linient view’ by the
respondent authority while passing the impugned order dated
20.11.2024. The Hon’ble Supreme Court in the case of
Mohinder Singh Gill v. Chief Election Commr., reported as
(1978) 1 SCC 405 had held as under :-
“8. The second equally relevant matter is that when
a statutory functionary makes an order based on
certain grounds, its validity must be judged by
the reasons so mentioned and cannot be
supplemented by fresh reasons in the shape of
affidavit or otherwise. Otherwise, an order bad
in the beginning may, by the time it comes to
court on account of a challenge, get validated
by additional grounds later brought out. We may
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
26/45
here draw attention to the observations of Bose,
J. in Gordhandas Bhanji [Commr. of Police,
Bombay v. Gordhandas Bhanji, 1951 SCC
1088 : AIR 1952 SC 16] :
“Public orders, publicly made, in
exercise of a statutory authority cannot
be construed in the light of explanations
subsequently given by the officer making
the order of what he meant, or of what
was in his mind, or what he intended to
do. Public orders made by public
authorities are meant to have public
effect and are intended to affect the
actings and conduct of those to whom
they are addressed and must be
construed objectively with reference to
the language used in the order itself.”
Orders are not like old wine becoming
better as they grow older.”
29. Therefore, the order of the Mines
Commissioner dated 03.05.2019 cannot be supplemented or
coloured by a subsequent order dated 20.112024 passed by the
respondent no. 03, while considering the representation of the
petitioners. The reasons that weighed with the then Mines
Commissioner while setting aside the order of the Collector has
to be ascertained and drawn from the very order itself. From
perusal of the order passed by the Mines Commissioner dated
03.05.2019 and the order dated 08.06.2019 passed by the
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
27/45
Collector, Kishanganj, it is abundantly clear that setting aside of
the earlier order of cancellation of settlement and its subsequent
restoration respectively, were both done on merits after
considering the relevant factors. Therefore the impugned order
dated 20.11.2024 is not sustainable since firstly, it attempts to
recast and colour the earlier order passed by the Mines
Commissioner as having been passed with a lenient view which
is impermissible, secondly, the fault is tethered on the sand ghat
settlee despite the fact that on merits such contentions had
already been crystallised and the settlement has been restored
with certain directions and thirdly, though the representation
was directed to be decided by the Principal Secretary-cum-
Mines Commissioner by taking an independent decision in the
matter, however the impugned order has been passed by the
respondent no.3 (Director, Department of Mines & Geology).
Accordingly, the impugned order dated 20.11.2024 stands
vitiated.
30. Now, coming to the second issue, whether
the sand ghat settlee was liable to pay the royalty during the
period when his settlement stood cancelled, in this regard, it
would be apposite to refer to a decision of the Hon’ble Supreme
Court in the case of Jai Durga Finvest (P) Ltd. vs. State of
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
28/45
Haryana & Ors. reported as (2004) 3 SCC 381 wherein it has
been held as under:-
“10. The question, thus, which was required to be
posed and answered was as to whether clause
18-A of the agreement would remain
enforceable despite the fact that the appellant
allegedly could not extract any sand by reasons
of omission and commission on the part of the
respondents concerned. The appellant herein
has raised a plea that the contract became
impossible to be performed as the landowners of
the area in question did not receive
compensation and despite request, the third
respondent did not enforce clause 27 of the
agreement.
11. It is not in dispute that the grant of mining lease
in favour of the appellant herein for the
extraction of mineral sand by the respondents is
governed by the provisions of the Punjab Minor
Mineral Concession Rules, 1964. In terms of
Rule 33 the bidder is required to execute a deed
in Form ‘L’. Clause 27 of the agreement in
Form ‘L’ obligates the respondents to comply
with the request made in terms thereof. The
Appellate Authority had not considered this
aspect of the matter. The High Court also did
not apply its mind in this behalf. The first
question that arises is whether the respondents
complied with their statutory obligations when
the request was made by the appellant. If not,
the second question would be the effect of non-
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
29/45
compliance with the statutory obligation of the
respondents which formed part of the contract
insofar as they did not comply with the
appellant's request as aforementioned which
had a direct bearing on the right of the
appellant to raise sand. The High Court, as
noticed hereinbefore, has merely proceeded on
the basis that the appellant had entered into the
contract with his eyes wide open; but, the same
would not, in our opinion, mean that they were
bound to pay the contract amount, get its
security amount forfeited, as also pay interest at
the rate of 24 per cent, although it could not, by
reason of acts of omission and commission on
the part of the respondents, carry out the mining
operation as per the terms of the agreement.
12. Whether in such a situation the doctrine of
frustration will be invoked or not should have
been considered by the High Court. [See M.D.,
Army Welfare Housing Organisation v.
Sumangal Services (P) Ltd. [(2003) 8 Scale 424
(2)]
13. For the reasons aforementioned, the impugned
judgment cannot be sustained, which is set aside
accordingly. The appeal is allowed and the
matter is remitted back to the High Court for
consideration of the matter afresh in the light of
the observations made herein on an early date.
No costs.
31. Further the Hon’ble Supreme Court in the
case of Chitra v. State of Kerala, reported as (2016) 1 SCC 685,
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
30/45
had held as under:-
“5. The facts are neither disputed nor are they
convoluted. The appellant had submitted an
application on 16-3-1990 for the grant of an FL
3 licence in respect of her Hotel Chanakya at
Trivandrum, which had been granted. However,
it transpired that a third party filed a suit in
which the Munsif Court, Trivandrum granted an
interim injunction restraining the Excise
Commissioner from issuing the said licence to
the appellant for user at her said hotel. This
suit, along with another suit similar to it, was
eventually dismissed on 29-9-1993. In an
ensuing appeal, the District Judge granted an
ad interim injunction on 15-4-1994, which came
to be vacated on 3-6-1994. On 23-11-1994, the
respondent rejected the appellant's application
for the FL 3 licence due to an amendment to the
Foreign Liquor Rules which had resulted in
private parties being ineligible for FL 3
licences. Consequently, the appellant filed OP
No. 18145 of 1994, which was allowed by the
Single Judge. Acting in accordance with the
Single Judge's directions, the Excise
Commissioner granted the licence and raised a
demand of only the proportionate licence fee
which was duly deposited; but the matter was
brought before the Division Bench in the subject
appeal. As already mentioned, it seems most
likely that the attention of the Division Bench
which passed the impugned judgment was not
brought to bear on the already existing binding
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
31/45
decisions in R. Vijayakumar [1994 Supp (2)
SCC 47 : (1993) 4 Scale 386] as well as
Jayadevan v. Board of Revenue [1998 SCC
OnLine Ker 209 : (1999) 1 KLJ 87] wherein the
Division Bench of the High Court of Kerala has
held that the licensee is required to pay only the
proportionate licence fee if the delay in granting
the licence, or utilising it, as the case may be,
are for reasons not attributable to the said
licensee.
6. We are in agreement with the learned Senior
Counsel for the appellant that the legal
principle to the effect that no person can be
prejudiced because of an act of a court is
apposite and relevant in the present case. We
say this keeping in perspective the position that
although the appellant had applied for the FL 3
licence which would ordinarily run the course of
one financial year, due to interim orders passed
by the courts, the appellant could only utilise it
for a fraction of that period. We hasten to clarify
that the appellant's application was not made in
the duration of that year and was thus initially
not for a fraction of the financial year. This
Court has already held in R. Vijayakumar [1994
Supp (2) SCC 47 : (1993) 4 Scale 386] , in the
circumstances prevailing in that case, that the
Department could not interfere with the
utilisation of the FL 3 licence, provided that the
licensee complied with all other conditions as
well as “payment of annual rental
proportionately”. It is, therefore, clear that Rule
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
32/45
14 would not impede or inhibit the charging of
annual proportionate fee so long as no failure is
placed on the licensee or it is blameworthy
itself. We must be quick to clarify that in the
event that a party applies for a period which is
obviously not effective for the entire financial
year, such as applying for a licence midway that
financial year, the full fee for that year may be
claimable or chargeable and, therefore, would
have to be paid. In other words, had the
appellant applied for the licence even with the
knowledge that because of external factors such
as a pre-existing injunction order, etc., she
would not have been able to exploit it for the
entire year, she may not have been liable to pay
the licence fee for the entire year. This is not the
factual matrix which obtains in the case at
hand; the licence could only be granted for the
period from 21-12-1999 to 31-3-2000 i.e. till the
close of that financial year, owing to
unforeseeable circumstances beyond the ken and
control of the parties before us. We have already
made a mention of the Division Bench judgment
delivered in Jayadevan [1998 SCC OnLine Ker
209 : (1999) 1 KLJ 87] which in turn was
referred to in another Division Bench judgment
in Rajagopalan Nair v. Commr. of Excise [1989
SCC OnLine Ker 387 : (1989) 1 KLT 800] ,
wherein the Division Bench directed that the
licensee was entitled to remission of payment of
kisht because of being disabled to conduct its
business on account of the interim orders passed
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
33/45
by the Court. We affirm the conclusions arrived
at in these decisions. We hold that a party is
entitled to seek a remission in the payment of
licence fee if it is precluded from transacting
business on the strength of that licence because
of factors and reasons extraneous to it and/or if
it is granted the licence on the direction of a
court for only a portion of the financial year.
7. The appeal is accordingly allowed. The
respondent State shall, within six weeks from
today, refund to the appellant the balance
amount of Rs 9,41,257 together with interest
thereon @ 6% p.a. with effect from 11-8-2005.
Failure to do so shall render the respondent
State liable to refund the aforementioned sum of
Rs 9,41,257 together with interest @ 12% p.a.
calculated from 11-8-2005 till the date of
payment and also additionally liable for
payment of costs quantified at Rs 15,000
(Rupees fifteen thousand only).”
32. The Hon’ble Supreme Court in the case of
Beg Raj Singh v. State of U.P., reported as (2003) 1 SCC 726
had held that the rights get crystalised on the date of
commencement of the litigation and, therefore, the settlement
holder would be entitled to the relief of continuing the lease till
the expiry of the lease term. The Hon’ble Supreme Court in the
aforesaid case had held as under :-
6. The only submission made by the learned
counsel for the appellant is that the appellant
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
34/45
has been given a very rough deal by the State
Government and the injustice done to the
appellant the High Court has failed to redeem.
He had identified and explored the new mining
area and made huge expenditure in making the
mining area approachable and therefore it was
the legitimate expectation of the appellant that
he would be entitled to operate the mine for a
minimum period of three years as per the
declared policy of the State Government. The
State Government should not have interfered
with the order of the Collector and that too at
the instance of a third party — Respondent 3,
when no auction was held and no right was
created in favour of Respondent 3. Matter as to
the grant or renewal of the lease for a total
period of three years was in accordance with the
policy of the State Government and was a
matter between the State and the appellant. It
was submitted at the end that the appellant has
been agitating his right diligently throughout
and the time lost in prosecuting legal
proceedings up to the High Court wherein the
plea raised by the appellant laying challenge to
the order of the State Government was found to
be meritorious and the order of the State
Government held liable to be set aside, the
appellant should not have been denied relief and
should have been allowed to operate the mine
for that period by which the mining operation by
the appellant fell short of three years' time.
7. Having heard the learned counsel for the
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
35/45
petitioner, as also the learned counsel for the
State and the private respondent, we are
satisfied that the petition deserves to be allowed.
The ordinary rule of litigation is that the rights
of the parties stand crystallized on the date of
commencement of litigation and the right to
relief should be decided by reference to the date
on which the petitioner entered the portals of the
court. A petitioner, though entitled to relief in
law, may yet be denied relief in equity because
of subsequent or intervening events i.e. the
events between the commencement of litigation
and the date of decision. The relief to which the
petitioner is held entitled may have been
rendered redundant by lapse of time or may
have been rendered incapable of being granted
by change in law. There may be other
circumstances which render it inequitable to
grant the petitioner any relief over the
respondents because of the balance tilting
against the petitioner on weighing inequities
pitted against equities on the date of judgment.
Third-party interests may have been created or
allowing relief to the claimant may result in
unjust enrichment on account of events
happening in-between. Else the relief may not be
denied solely on account of time lost in
prosecuting proceedings in judicial or quasi-
judicial forum and for no fault of the petitioner.
A plaintiff or petitioner having been found
entitled to a right to relief, the court would as an
ordinary rule try to place the successful party in
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
36/45
the same position in which he would have been
if the wrong complained against would not have
been done to him. The present one is such a
case. The delay in final decision cannot, in any
manner, be attributed to the appellant. No
auction has taken place. No third-party interest
has been created. The sand mine has remained
unoperated for the period for which the period
of operation falls short of three years. The
operation had to be stopped because of the
order of the State Government intervening
which order has been found unsustainable in
accordance with stipulations contained in the
mining lease consistently with GO issued by the
State of Uttar Pradesh. Merely because a little
higher revenue can be earned by the State
Government that cannot be a ground for not
enforcing the obligation of the State
Government which it has incurred in
accordance with its own policy decision.
33. A Co-ordinate bench of this Court in the case
of Jan Kalyan Sharmik Swalambi Shakari Samitee Limited vs
State of Bihar & Ors. C.W.J.C. No. 8591 of 2012, had directed
for recalculation of the dues for the period during which the
settlee- petitioner therein, was precluded from excavating sand
and has held as under -
“17. It is admitted case of the respondents that
petitioner was banned from lifting sand from
sand ghat D on 16.1.2009 and thereafter, lifting
of sand from sand ghat D was forcibly stopped
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
37/45
giving direction to all concerned officers-in-
charge of police stations vide his order dated
16.02.2009 and, therefore, it is apparent that the
petitioner was not in a position to extract sand
from sand ghat D after 06.02.2009 and,
therefore, at best, respondents can make
responsible to the petitioner for deposit the
amount till 06.02.2009 and the respondents can
not realize the amount after 06.02.2009.
18. So far as allegation of illegal extracting of sand
from sand ghat D and selling ghats to different
persons are concerned, admittedly,respondents
did not lodge any FIR in respect of seizure of so-
called fake and forged challans as well as
illegal mining against any person including the
petitioner, particularly, in the circumstance,
when there is specific provision in rule 40 of the
Bihar Minor Mineral Concession Rules, 1972
for institution of the FIR.
19. However, I have already stated that the
petitioner denied the aforesaid allegation but no
opportunity, was given to the petitioner to rebut
the aforesaid allegation. It is pertinent to note
here that settlement of the petitioner was
cancelled mainly on the ground of making
default in deposit of instalment and not on the
ground of illegal extraction of sand from sand
ghat D.
20. As I have already stated that the petitioner was
debarred from extraction of sand vide order
dated 16.01.2009 and he was forcibly stopped
from extracting sand from sand ghat D with the
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
38/45
help of the concerned officers-in-charge of
police stations vide order dated 06.02.2009 and,
therefore, in my view, the respondents can not
realize any rent/royalty from the petitioner after
06.02.2009.
21. On the basis of the aforesaid discussions, this
writ petition stands disposed of with direction to
the respondents to re-calculate the dues amount
including rent/royalty till 06.02.2009 and pass a
fresh order in respect of realization of dues
amount from the petitioner in accordance with
rules and adjust the same with the amount
already deposited by the petitioner with the
respondents and return the remaining amount, if
any, to petitioner within 30days from the
recalculation of the dues amount.”
34. Further a Co-ordinate Bench of this Court in
the case of Chandan Kuma vs State of Bihar & Ors. (C.W.J.C.
No. 6526 of 2017), after noticing that the settlee - petitioner
therein, could not carry out mining activity on account of delay
attributable to the respondents, had directed for adjusting the
amount payable by the settlee and had held as under -
“In my opinion, the circumstances
discussed would confirm, that the State is
litigating at its worse level for even when it is
undisputed that the petitioner could not operate
the Sand Ghats for even a single day in 2016
primarily because the Mining Department
delayed the approval to the mining plan which
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
39/45
was issued on 27.12.2016 and which delay was
perpetuated by the State Level Environment
Impact Assessment Authority, Bihar in delaying
the grant of environmental clearance. The State
yet intends to pocket that amount by denying
the benefit to the petitioner and penalizing the
petitioner without any fault. This cannot be
allowed.
The principle of unjust enrichment
applies to all and in the present case the State
cannot be allowed to become unjustly rich at
the cost of a bona-fide settlee.
In the circumstances this writ petition is
allowed. The authorities of the Mining
Department more particularly the respondent
no.3 and 4 are accordingly directed to raise a
fresh demand within a period of 4 weeks of
receipt/production of a copy of this order in
accordance with law, for the remaining period
of 2017 after adjusting the settlement amount
realized from the petitioner for the year 2016
bearing in mind that more than 11 months has
passed even in the year 2017.”
35. This Court has also noted that a Co-ordinate
Bench of this Court in Amarnath Singh v. State of Bihar &
Ors., reported as 2021 SCC OnLine Pat 2796 had held as
under :-
18. Having considered the rival submissions of the
learned counsel for the parties, this Court is of
the considered view that an obligation had been
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
40/45
casted on the respondent-State/the respondent
Mines Department, not only to prepare the
mining plan and obtain the environmental
clearance but also to issue work order to the
petitioner, who is a successful bidder and
execute a mining lease in his favor, more so
after the respondent-State/the respondent Mines
Department had got the security money, earnest
money and other amounts deposited from the
petitioner for the purposes of settlement of the
sand ghats in question for a period of five years
with effect from 01.01.2020 as per clause-9 of
the tender document, however, the respondent-
State/the respondent Mines Department has
committed a breach of such statutory obligation,
hence it cannot be permitted to take advantage
of such a situation and make a profit out of its
own wrong, thus the only just and legal course
left to this Court, to set right the wrong, is to
direct the respondent-State/the respondent
Mines Department to refund the security money,
earnest money and processing fees deposited by
the petitioner for the purposes of being granted
settlement of Aurangabad Sone Sand Ghat No.
32, pursuant to the E-auction held on
26.12.2019, along with interest @ of 9% per
annum with effect from the day, the said
amounts were deposited, till the date of
payment, especially considering the fact that the
respondent-State/the respondent Mines
Department has illegally and in an unjust
manner retained the aforesaid amount deposited
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
41/45
by the petitioner. It is directed accordingly.
36. From the afore-quoted decisions, it is clear
that the sand ghat settlee cannot be forced to pay the royalty in
absence of any actual mining of sand, for the reasons not
attributable to the sand ghat settlee. In the present case, the
husband of the petitioner no.1 was precluded from carrying out
mining operations on the strength of the order passed by the
then Collector, Kishanganj in Miscellaneous Case No. 01 of
2018 (Mines) dated 29.01.2019, pertinently, the aforesaid order
was set aside by the Revisional authority – Mines
Commissioner vide order dated 03.05.2019 and subsequently,
the settlement was restored by an order dated 08.06.2019. In
such peculiar circumstances, the prejudicial consequences could
not be borne by the husband of the petitioner no.1 and the State
could not profit as a consequence and at the cost of the sand
ghat settlee.
37. The State could not fasten monetary burden
upon the settlee for the very period during which the settlee was
legally disabled from operating the sand ghat settled in his
favour by an order, which was subsequently set aside and
ultimately the settlement stood restored. Further, the State
cannot unjustly enrich itself at the cost of the sand ghat settlee
by saddling him with royalty for the period during which no
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
42/45
actual mining work took place on account of and on the strength
of the cancellation order passed by the then Collector,
Kishanganj, which was subsequently found unsustainable, more
so when royalty is fundamentally tied to the mineral actually
excavated and removed.
38. Therefore, the sand ghat settlee can not be
saddled with monetary obligations during the period that the
cancellation of settlement subsisted on the strength of the order
of the then Collector Kishanganj which had subsequently failed
revisional scrutiny. The revisional order passed by the Mines
Commissioner, by setting aside the cancellation order, denudes
the aforesaid order of its legal foundation which is further
fortified by the fact that the settlement was subsequently
restored. Consequently, any financial burden imposed upon the
sand ghat settlee for the interregnum period, during which the
cancellation subsisted would amount to unjust windfall.
Accordingly, the petitioners deserve refund of the amount paid
in protest for the period during which the sand ghat settlee could
not operate the sand ghats allotted to him.
39. This Court has noted that a substantial
amount was paid under protest by the sand ghat settlee which
has remained with the respondent authorities to the deprivation
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
43/45
of the petitioners for about seven years.
40. In the case of Umesh Singh Yadav vs. State
of Bihar C.W.J.C No. 13717 of 2021, the Division Bench of
this Court while considering the refund of security deposits for
the sand ghat settlements made in the year 2019, had, in the
facts of the case therein, allowed the petitioner therein to
approach the appropriate authority for award of interest. A Co-
ordinate Bench of this Court in Block Chain Warehousing and
Jute Pvt. Limited vs. State of Bihar C.W.J.C No. 1249 of 2024,
had also permitted the petitioner therein to approach the
respondent authorities on the question of interest after the
payment/refund of security amount.
41. Furthermore, a Co-ordinate Bench of this
Court in M/s Asha Info Solutions Pvt. Ltd vs. State of Bihar
C.W.J.C No. 18194 of 2022, while considering the non-payment
of monies to a contractor despite timely finishing the work had
directed for payment of compensatory interest on delayed
payments.
42. It is, therefore, a settled position of law that
the underlying principle guiding award of interest is that,
interest payment is essentially compensatory in nature.
43. In the present case, the sand ghat settlee was
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
44/45
precluded from operating the sand ghats allotted in his favour
only on the strength of an order of cancellation which was
subsequently set aside and the settlement was restored upon
remand, however he had made the entire payment under protest
and under fear of institution of criminal case against him. As
such, the sand ghat settlee and the present petitioners have
suffered deprivation of huge sum of money on account of the
operation of an order which could not sustain the test of
revisional authority. The deprivation ought to be corrected and
compensated suitably.
44. Accordingly, the order as contained in memo
no. 4878, dated 20.11.2024 passed by the respondent no. 03 in
Miscellaneous Case No.04 of 2024 is hereby quashed and set
aside.
45. For the foregoing reasons and discussions,
this Court, in the interest of justice, deems it appropriate to pass
the following directions :-
i) The respondents are directed to refund, on a
pro rata basis, the bid amount, for the period
from 07.02.2019 to 08.06.2019 i.e. the
period in which the sand ghat settlee, that is,
husband of the petitioner no.1 was precluded
Patna High Court CWJC No.4167 of 2025 dt.16-04-2026
45/45
from carrying out the mining activities in the
sand ghats allotted to him. The respondents
shall work out and quantify the final amount,
after affording the petitioners with an
opportunity of hearing and thereafter pass a
reasoned and speaking order. The aforesaid
exercise shall be completed within eight
weeks from the date of receipt/production of
a copy of this order.
ii) Furthermore, the respondents are also
directed to pay a compensatory interest on
aforesaid quantified amount, so worked out,
at a simple interest of 6% per annum.
46. With the aforesaid observations and
directions this writ petition is allowed in the above terms.
(Sandeep Kumar, J)
Vikas/ Pawan
AFR/NAFR N.A.F.R.
CAV DATE 19.01.2026
Uploading Date 28.04.2026
Transmission Date
Checking your session…