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2006 DIGILAW 3159 (PNJ)

Jai Durga Finvest v. State of Haryana

2006-08-04

S.N.AGGARWAL

body2006
JUDGMENT S.N. AGGARWAL, J. 1. This writ petition filed by the petitioner was decided by this Court vide order dated 7.10.2002 and it was partly allowed. However, the petitioner was not satisfied with this order and he filed Special Leave to Appeal in the Hon’ble Supreme Court (Civil Appeal No.9267 of 2003 arising out of SLP (C) No. 9491 of 2003). The said appeal was accepted by the Hon’ble Supreme Court vide judgment dated 5.1.2004. The order of this Court dated 7.10.2002 was set aside and the matter was remitted to this court with the direction to consider the matter afresh in the light of the observations made by the Hon’ble Supreme Court in the judgment. This is how the matter is before this Bench. 2. The respondents had held auction on 6.4.1998 for the grant of contract of Bega-Murthal Sand Zone in District Sonepat for the extraction of minor mineral (sand). The petitioner offered the highest bid of Rs. l, 48, 00,000/- per annum. It was accepted. The petitioner was to pay monthly installment of Rs.12, 33,334/- .Thereafter, a contract agreement dated 30.11.1998 (Annexure P-l) was executed between the petitioner and the respondents for the period from 11.10.1998 to 31.3 .2001. The petitioner had also deposited a sum of Rs.37,00,000/- as security. These facts are undisputed. 3. The version of the petitioner is that he had approached the land owners of villages Nandnaur, Larsauli, Pipli Khera, Murthal and Bhagan for settlement of compensation so that the sand can be extracted by the petitioner by carrying out the mining operation but the land owners did not agree. The petitioner was unable to settle the amount of compensation for the use of land and for the purpose of sand mining, therefore, the petitioner requested the Mining Officer (respondent No.3) for getting the compensation assessed from the Collector. However, the respondents failed to respond. As a result the petitioner could not extract any sand from Bega-Murthal Sand Zone. Somehow, the petitioner paid the monthly installments upto 31.8.1999. The Mining Officer (respondent No.3) issued one month notice dated 19.1.2000 for termination of the contract alleging that the petitioner had failed to pay the installments and interest thereon from September 1999 to January 2000. Thereafter the contract was terminated by the Director, Mines and Geology, Haryana (respondent.No.2) vide order dated 9.3.2000. The security amount was also forfeited. The Mining Officer (respondent No.3) issued one month notice dated 19.1.2000 for termination of the contract alleging that the petitioner had failed to pay the installments and interest thereon from September 1999 to January 2000. Thereafter the contract was terminated by the Director, Mines and Geology, Haryana (respondent.No.2) vide order dated 9.3.2000. The security amount was also forfeited. The petitioner filed the appeal which was partly accepted by the Appellate Authority vide order dated 10.7.2000 and the security was ordered to be adjusted towards the outstanding amount against the petitioner. The petitioner received the demand notice from the respondents for depositing a sum of Rs.68, 35,298/- out of which the petitioner had deposited a Sum of Rs.26, 00,000/- on 18.8.2000.However, respondents were not entitled to the contract money from 10.3.2000 to 7.4.2000. The petitioner filed this civil writ petition seeking the following reliefs: “(a) issue a writ of certiorari quashing the impugned notice dated 4.8.2000 to the extent it demands contract money and interest thereon @ Rs.24% P.A. after expiry of one month notice dated 19.1.2000 terminating the contract or in the alternative the demand of contract money and interest thereon from 9.3.2000 to 7.4.2000,be declared null and void and quashed; (b) issue an appropriate writ, order or direction declaring clause 19 of the agreement; P/1 as null and void to the extent it stipulates non-payment of interest on the heavy amount of security deposited by the petitioner and that direction be issued to respondents to pay interest @ 24% P.A. on the amount of security till, final adjustment qua the outstanding contract money; (c) issue further an appropriate writ, order or direction to the respondents not to charge interest on the amount of contract money being demanded from the petitioner vide order dt.10.7.2000;P/3 and notice dated 4.8.2000;” 4. The respondents contested the case and the written statement was filed. Prior history of the auction held on 19.3.1998 and the filing of litigation by the petitioner was referred to. It was admitted that the petitioner had given the highest bid of Rs. 1, 48, 00,000/- in the auction held on 6.4.1998. It was also pleaded that the petitioner failed to pay the contract money from 1. 9 .1999 to 31.1.2000 and total outstanding amount was Rs.58, 48,670/- for which the respondents had served a statutory notice to the petitioner to deposit the amount within a period of 30 days. 1, 48, 00,000/- in the auction held on 6.4.1998. It was also pleaded that the petitioner failed to pay the contract money from 1. 9 .1999 to 31.1.2000 and total outstanding amount was Rs.58, 48,670/- for which the respondents had served a statutory notice to the petitioner to deposit the amount within a period of 30 days. It was also admitted that the contract was terminated by the respondents on 9.3.2000 on the ground of nonpayment of monthly installments and non-submission of monthly returns. In spite of the termination of the contract, the petitioner continued lifting their stock of sand upto 7.4.2000. On merits, it was pleaded that under Sub-Rule 27, in case of non-settlement of compensation with the land owners, the petitioner was required to report the matter to the Mining Officer, Sonepat by depositing 10% of the bid money as tentative compensation to be paid to the landowners. The petitioner had neither given the details of the land of various villages from where they intended to extract sand and nor they deposited 10% of the amount of tentative compensation. The respondents also took the plea that in fact the petitioners were not very keen to commence mining operation as they had entered into some sort of arrangement with the contractors of neighbouring sand zones according to which the extraction of sand was to be carried out only in two sand zones i.e. Khatkar and Khewra, keeping the third zone i.e. Bega Murthal as idle. Accordingly, the dismissal of the writ petition was prayed. 5. The arguments which were advanced earlier by the learned counsel for the petitioner were noticed by this Court in the order dated 7.10.2002 as under :- “During the course of arguments, Mr. Yadav, confined his submissions to two points, namely, that after the admitted termination of the lease on 9.3 .2000, the respondents had no legal right to claim rent and interest upto 7.4.2000, which had been claimed by them, according to the calculation sheet (Annexure P-5). He also submitted that clause 18-A of the contract, which indicates that no interest would be payable on the security deposited by the petitioner, was in executable on account of the fact that if the said amount had been placed with a Banking Institution, the petitioner would have become entitled to receive interest thereon.” 6. He also submitted that clause 18-A of the contract, which indicates that no interest would be payable on the security deposited by the petitioner, was in executable on account of the fact that if the said amount had been placed with a Banking Institution, the petitioner would have become entitled to receive interest thereon.” 6. The interest on the security amount was declined by this Court by observing that there was a specific condition in the agreement and therefore, the petitioner cannot resile and go back from the terms and conditions of the sanction order. However, a part of relief was granted to the petitioner by holding that the respondents were not entitled to demand lease money for the period from 10.3.2000 to 7.4.2000, as the lessee was denied its right to extracts and after 9.3.2000. 7. However, the point taken before the Hon’b1e Supreme Court by the learned counsel for the petitioner was that the petitioner could not extract sand from the contracted places because the respondents had failed to cooperate for which they were legally bound under Clause 27 of the agreement dated 30.11.1998 and therefore, the respondents were responsible for the loss suffered by the petitioner because of non-extraction of sand and therefore, the petitioner was entitled to be refunded the entire amount paid by it to the respondents with interest. The Hon’ble Supreme Court made reference to the provisions of Clauses 9, 17, 18 and 27 of the agreement dated 30.11.1998 and was pleased to observe as under: “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 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 respondent 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 whether the respondents complied with their statutory obligations when the request was made by the appellant. 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 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-compliance of the statutory obligation of the respondents which formed part of the contract in so far as they did not comply with the appellant’s request as aforementioned which had a direct bearing to the right of the appellant to raise sand. As the High Court, as noticed here-in- before, 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.” 8. This Court is now to re-determine the issues, keeping in mind the observations made by the Hon’ble Supreme Court. 9. Thereafter the petitioner filed an application for amendment of the civil writ petition. It was contested. This Court vide order dated 26.5.2006 partly dismissed the application and the remaining part (Clauses 14-D, 14-E, 15 and prayer) was ordered to be decided along with the main writ petition. 10. In para 14-D of the application, it is pleaded that the amount paid by the petitioner be ordered to be refunded with interest @ 24 %per annum as the contract was terminated pre-maturely. In para 14-E, he has calculated the amount which he would have earned from the contract. It was also prayed that the petitioner is entitled to the doctrine of frustration under Section 56 of the Contract Act and the respondents be directed to compensate the losses suffered by the petitioner to the tune of Rs.30 crores. 11. Reply was filed by the respondents. It was contested. Its dismissal was prayed. 12. It was also prayed that the petitioner is entitled to the doctrine of frustration under Section 56 of the Contract Act and the respondents be directed to compensate the losses suffered by the petitioner to the tune of Rs.30 crores. 11. Reply was filed by the respondents. It was contested. Its dismissal was prayed. 12. The first point argued before me by the learned counsel for the petitioner was that the petitioner-firm could not extract sand as the villagers had refused to cooperate and when the petitioner sought the help of the respondents under the terms and conditions of the contract agreement dated 30.11.1998 (Annexure P-1), they failed to fulfill their statutory obligations imposed on them. Particular reference was made to the provision of Clause 27 of the agreement dated 30.11.1998, under which the petitioner could make a request to the respondents for assisting the petitioner in getting the land from occupiers/owners of the land, from where the sand was to be extracted and the respondents were legally obliged to refer the matter to the Collector for this purpose. But in spite of that no such assistance was rendered by the respondents to the petitioner. Precisely, this was the argument of the petitioner before the Hon’ble Supreme Court. In fact this point alone will mainly determine the fate of this petition including the reliefs sought in the amendment application which is also to be decided with the main petition. The question to put it briefly is, if the petitioner could not extract sand because of the fault of the respondents. 13. Before proceeding further, we may look at the contents of Clause 27 of the agreement dated 30.11.1998. It reads as under: 27. The question to put it briefly is, if the petitioner could not extract sand because of the fault of the respondents. 13. Before proceeding further, we may look at the contents of Clause 27 of the agreement dated 30.11.1998. It reads as under: 27. Acquisition of land of third parties and compensation there of: In accordance with provisions of clause 9 of this agreement the contractor shall offer to pay compensation to an occupier on owner of the surface of the land wherefrom the minor mineral will be raised, including the land required for use as access to the quarry/mine, stacking of mineral and purpose subsidiary thereto for any damage or injury which may arise from the proposed mining operations of the contractor and in case the said occupier or owner refused his consent to the exercise or the rights and powers reserved to the government and demised to the contractor under these presents, the contractor shall report the matter to the Assistant Mining Engineer/Mining Officer posted in the District who shall request the collector of the District concerned to direct the occupier or the owners on such mining/quarrying operations as may be necessary for the working of the mine/quarry, on deposit with the collector to the occupier or the owner by the contractor subject to its final fixation by the collector under the land Acquisition, Act, 1894: a)10% of the annual contract money for land comprising the quarry/mine; and b)A sum of rate of one rupee per square yard in the case of waste land per year for land to be used for access to quarry/mine, stacking of minerals and other subsidiaries purposes. The contractor shall use the shortest possible route for access to the quarry/mine. If the amount of final compensation works out to be more than the tentative amount of compensation already deposited/ the contractor shall deposit immediately on demand by the collector the additional amount of compensation. If however, the amount of final compensation is less than the amount already deposited by the contractor, the excess amount shall be refunded to him.” 14. The above clause makes the things clear. It apportions the duties of the mines contractor and of the Mining Officer, so that the contract arrived at between them is not defeated. If however, the amount of final compensation is less than the amount already deposited by the contractor, the excess amount shall be refunded to him.” 14. The above clause makes the things clear. It apportions the duties of the mines contractor and of the Mining Officer, so that the contract arrived at between them is not defeated. The petitioner had pleaded in paragraph 4 of the writ petition that the petitioner was unable to settle the amount of compensation for use of the land for the purpose of sand mining and as such requested the Mining Officer- respondent No.3 for getting the compensation assessed from the Collector, which did not yield any result. 15. In reply to this paragraph a specific plea was taken by the respondents as under: 1"In reply to para 4 of the writ petition, it is submitted that at the time of execution of contract agreement as required by Condition No.7 of the Auction notice and also by the acceptance letter the petitioner submitted an affidavit to the effect that they shall settle the compensation at their level with the land owners and indemnify the State Government in this regard and shall not claim any relief in payment of contract money on the plea that the land owner had interfered in the extraction of sand. In case of non-settlement of compensation at their level with the land owners the petitioners were required to report the matter to the Mining Officer, Sonipat and also deposit 10% of the bid amount as tentative compensation to be paid to the land owners, so as to enable the Mining Officer, Sonipat to refer the case for fixation of compensation under Rule 61 of the State Rules to the collector Sonipat. In the present case the petitioner neither deposited the tentative compensation with the Mining Officer, Sonipat nor gave him the detail of the land of various villages from where they intended to extract sand. Infact petitioners were not very keen to commence mining operation as they had entered into some sought of arrangement with the contractors of neighbouring sand zones according to which the extraction of sand was to be carried out only in two sand zones i.e. Khatkar & Khewra, keeping the third zone i.e.Bega Murthal as idle.” 16. Infact petitioners were not very keen to commence mining operation as they had entered into some sought of arrangement with the contractors of neighbouring sand zones according to which the extraction of sand was to be carried out only in two sand zones i.e. Khatkar & Khewra, keeping the third zone i.e.Bega Murthal as idle.” 16. Before we take up the version of the respondents, it may be seen that the petitioner had not given the details in the writ petition about the dates when the notices were given by him to the respondents or how many notices were served by the petitioner on the respondents or what were the contents of those notices. So much so, even copies of said notices were not attached with the writ petition. No postal receipt or acknowledgment due was filed with the writ petition to prove if any such notice was sent by the petitioner to the respondents by registered cover or if the registered cover was served on the respondents. Therefore, the pleadings made by the respondents were merely vague. 17. As per the version of the respondents, not only the petitioner was to extract the sand at his own responsibility, for which he had given the affidavit to the respondents, at the time of auction, but even the alleged notice which was sent by the petitioner to the respondents did not comply with the provisions of Clause 27 of the agreement dated 30.11.1998. The petitioner had failed to give names of the landowners who were creating obstruction in the sand extraction, particulars of that land from which the sand was to be extracted and details of the villages involved, in the notice. Nor the deposit of 10% of the bid money was sent along with the notice. 18. This Court was totally in dark about the contents of notice or the date of the notice, which was allegedly served by the petitioner on the respondents. However, in the reply filed by the respondents to the application for amendment, a copy of the notice dated 28.12.1999,sent by the petitioner to the respondents was attached. It reads as under: “ To The Mining Officer, Sonepat.: Subject:GIg/Cont/SNP/98-2001/Bega Murthal Zone/7462 for the period 10.10.98 to 31.3.2001. However, in the reply filed by the respondents to the application for amendment, a copy of the notice dated 28.12.1999,sent by the petitioner to the respondents was attached. It reads as under: “ To The Mining Officer, Sonepat.: Subject:GIg/Cont/SNP/98-2001/Bega Murthal Zone/7462 for the period 10.10.98 to 31.3.2001. Sir, We have taken the contract in auction for extraction of sand from 56 villages of Bega Murtha zone @ Rs.1,48,00,000/- (One crore forty eight lacs only) Per Annum for the period upto 31.3.2001 and also paid Rs.37,00,000/- as security and Rs.12,33,334/- as advance installment. From the date of acceptance of bid to date we could not work in any village in spite of best efforts made by us and despite this we have paid the installments from other sources so that the contract may not be disturbed. Now you are requested to take action to arrange the land from these villages. Because without work we are unable to pay the contract money. You are requested to tell us that as per conditionNo.27 of agreement how much amount and in whose favour is to be deposited. You are informed that books given to us for running the work also are lying unused with us. So you are requested to kindly get the possession of the land urgently so that we may be able to start our work. Thanking you. For Jai Durga Finvest Pvt. Ltd. sd/ (Parveen Kumar)” This letter was responded by the respondents. It was replied by the respondents vide their letter dated 10.1.2000. It reads as under: “From The Mining Officer, Mines and Geology Department, Sonipat. To M/s.Jai Durga Finvest Pvt. Ltd., 703/14, Sonipat. Memo No.105 dated 10.1.2000. Subject: Glg/Cont/SNP/98-200l/Gega Murthal zone /7462 for the period 10.10.98 to 31.3.2001. Under the aforesaid subject with reference to your Memo No. Nil dated 28.12.99. You have been granted the contract of aforesaid zone w.e.f. 10.10.98. After that you executed agreement deed with the deptt. At that time you gave an affidavit to this office that we shall take land from owners at our own level. From 10.10.98 to 28.12.99. You have never intimated this office about any type of difficulty. Now as the installment of contract money for the month of September, 1999 amount to Rs.9, 08,334/- and for the month of Oct., 1999 to December, 99 and January-2000 are also due to you then you have written this letter. From 10.10.98 to 28.12.99. You have never intimated this office about any type of difficulty. Now as the installment of contract money for the month of September, 1999 amount to Rs.9, 08,334/- and for the month of Oct., 1999 to December, 99 and January-2000 are also due to you then you have written this letter. In addition to this, you have never returned the weighment slip books which were issued to you. You are working in village Nandnaur from beginning. Even then if you are facing any difficulty in getting possession of land in any village, then submit the details of land, like name and village, total area required, name of land owner, Khasra Girdawari, Kila No. etc. along with 10% tentative compensation immediately so that the possession of required land, after fixation of compensation by the collector can be handed over to you. In addition to this you are hereby informed that deposit the outstanding installments of contract money of your contract along with interest immediately, if you fail to deposit the amount, the process of termination of your contract shall be initiated. Sd/ Mining Officer Mining & Geology Deptt., Sonipat. Endst.No.06 dated 10.1.2000 A copy of above is forwarded to the Director ,Mines & Geology, Haryana for information and further necessary action please. Sd/ Mining Officer Mining & Geology Deptt., Sonipat.” 19. These letters prove two things, firstly, that after the execution of “the agreement dated 30.11.1998, the petitioner had served a notice on the respondents for the first time on 28.12.1999 i.e. more than one year after the execution of the agreement or in other words, after the expiry of more than one year of lease/licence period. If the petitioner was not extracting the sand or if there was obstruction in his way in getting the benefit of this agreement dated 30.11.1998, then he would have reported the matter to the respondents immediately after it failed to get response from the villagers/owners/occupiers of the land, from where they wanted to extract the sand. The silence of the petitioner for full one year clearly reveals that he was sitting silent. The petitioner was not only sitting silent for one year but he was also making the payment of monthly installments, which he paid upto August 1999. The silence of the petitioner for full one year clearly reveals that he was sitting silent. The petitioner was not only sitting silent for one year but he was also making the payment of monthly installments, which he paid upto August 1999. If the petitioner was not extracting any sand, he would not have paid even the first installment and would have complained to the respondents immediately, which he did not do. 20. In the rejoinder to the reply to the amendment application, the petitioner pleaded that he had served the first notice on19.11.1998. It appears to be totally false. Firstly, the agreement itself was executed on 30.11.1998 (Annexure P-1). How the notice could be served by the petitioner before he became entitled to extract sand. Secondly, no such plea was taken by the petitioner in the writ petition. Thirdly, it was not stated in the notice dated 28.12.1999 if the petitioner had given the notice earlier on 19.11.1998. Fourthly, if he had given the notice on 19.11.1998 and had not received any reply, he would not have waited for one year to send another notice to the respondents on 28.12.1999, no postal receipt or A.D. has been placed on the file in support of the plea that this notice dated19.11.1998 was sent to the respondents and lastly, a copy of that notice has not been filed which was allegedly sent by the petitioner to the respondents. This was necessary when the respondents are denying specifically if any such notice was received by them. The net result is that the petitioner is taking a false plea to corner the respondents and to get undue benefits in spite of his own omission and commission. 21. There is another circumstance on the file which also shows negligence/omission on the part of the petitioner. Clause 15 on the agreement dated 30.11.1998 required the petitioner to submit monthly reports/returns about the sand extracted. It reads as under: “15. To submit reports and returns: The contractor shall submit a monthly return in form’ C’ by the 10th of each month to the director and to the Mining Officer concerned, giving the total quantity of minor minerals raised and dispatched from the specific area out of the area under contract in the proceeding calendar month and its value and such other information relating to the contract as may be called for by the Directors.” 22. If the petitioner was not getting any sand, he would have submitted a monthly report/return to that effect. But it is not pleaded by the petitioner any where if it had been sending the monthly reports/returns about the extraction of the sand to the respondents showing the extraction as Nil. The silence of the petitioner about this clause of agreement dated 30.11.1998 also reveals that the petitioner himself is to be blamed in not reporting the matter to the respondents in time. The failure of the petitioner to inform the respondents would mean either that he was getting due benefit under the agreement or that the petitioner himself is to be blamed for the non-extraction of sand. 23. The petitioner was also told in the reply dated 10.1.2000 that the petitioner was working in the village Nandnaur from the beginning. 24. It was clarified to the petitioner in the reply dated 10.1.2000 that in case he was facing difficulty in getting possession of land in any village, then he should submit details of the land, like the name of the village, total area required, name of the land owner, khasra girdawari, killa number etc., along with the deposit of 10% of the tentative compensation immediately, so that the possession of the required land, after fixation of the compensation by the Collector, could be handed over to the petitioner. Even Clause 27 of the agreement dated 30.11.1998 reproduced above, specifically requires the petitioner to deposit 10% of the annual contract money for the land comprising the quarry/mine. In the notice dated 28.12.1999 the petitioner had neither given the details about the land or about the village or about the land owners nor it had sent the requisite money i.e. 10% amount of the tentative compensation money. Therefore, that notice was virtually no notice. When the respondents had responded to the letter dated 28.12.1999 by writing to the petitioner on 10.1.2000, asking the details and for payment of 10% of the tentative amount of compensation by the petitioner, as required under Clause 27 and still the petitioner omitted to comply with it, it cannot be pleaded by the petitioner that the respondents had failed to discharge their statutory liability. 25. 25. Rather it would mean that the petitioner himself was guilty of not complying with the terms and conditions of the agreement dated 30.11.1998 and the petitioner was trying to pass on the buck to the respondents for the fault which lay at his own door. 26. The admitted case of the parties is that notice dated 19.1.2000 was served on the petitioner calling upon him to make the payment of monthly installments starting from 1.9.1999 to January 2000, failing which the contract would be cancelled. Instead of responding to the reply dated 10.1.2000, or the notice dated19.1.2000, the petitioner again wrote another letter dated 25.1.2000 to the respondents repeating the same thing and calling upon the respondents to help him in providing the land in villages Larsauli,Pipli Khera, Murthal and Bhigan, so that he may do mining and extract sand. This letter is faulty, not only for the reasons stated above, but also for the reasons that neither the Khasra numbers of the land, from where the extraction of the sand was to be done, nor the names of the land owners, who were creating problems for the petitioner, were given. Even 10% of the bid money, which was clearly known to the petitioner and which was laid down in Clause 27 of the agreement dated 30.11.1998, were not remitted to the respondents as tentative compensation payable to those farmers whose land was required for extraction of sand. Therefore, this notice dated 25.1.2000 also has no legal value at all. 27. The Hon’ble Supreme Court was pleased to observe that two questions were to be taken care of and answered by this Court, the first of which was, whether the respondents had complied with their statutory obligation, when the request was made by the appellant and the second was, if the said statutory obligation was not discharged by the respondents its effect on non- extraction of sand, by the petitioner. The second question was dependent on the answer to the first question. 28. As discussed above, the petitioner has failed to show if the respondents had failed to comply with the statutory obligations. The petitioner remained silent for more than one year after execution of the agreement on 30.11.1998. The second question was dependent on the answer to the first question. 28. As discussed above, the petitioner has failed to show if the respondents had failed to comply with the statutory obligations. The petitioner remained silent for more than one year after execution of the agreement on 30.11.1998. When the notice was served by him on 28.12.1999, not only this notice lacked particulars but even the deposit of 10% tentative amount of compensation, which he was bound to remit by the terms of the agreement was not made. This letter was responded by the respondents by which they required the petitioner to give the details of the land and names of the landowners. The petitioner was also required to furnish 10% of the bid money but the petitioner failed to comply with this letter. The petitioner also failed to pay monthly installments after August 1999 and also failed to respond to the notice dated 19.1.2000. As a result, the whole contract had to be cancelled by the respondents and the security amount deposited was forfeited vide order dated 9.3.2000.Therefore, by no stretch of imagination, it can be argued if the respondents had failed to comply with their statutory obligations. Since the respondents have not failed to comply with their statutory obligations, the second question just ceased to exist. 29. The petitioner had filed an appeal against the order dated 9.3.2000 vide which the security amount of Rs.37 lacs deposited by him, was forfeited. The Appellate Authority had upheld the termination of the contract effected vide order dated 9.3.2000.However, it partly accepted the appeal vide order dated 10.7.2000 and the security amount which was ordered to be forfeited, was ordered to be adjusted against the outstanding contract money and interest (Annexure P-3). 30. The learned counsel for the petitioner has relied upon certain judgments of the Hon’ble Supreme Court reported as Beg Raj Singh v. State of U.P. And others (2003) 1 Supreme Court Cases 726, Food Corporation of India and others v. Babulal Agrawal (2004)2 Supreme Court Cases 712, Ghaziabad Development Authority v. Union of India and another (2000) 6 Supreme Court Cases 113, State of Punjab v. Sardar Sewa Singh Gill and others 1969 (3)Supreme Court Cases 321 and Uberoi Mohinder Singh and Associates v. State of Haryana and others (1991) 2 Supreme Court Cases 362. These judgments are not applicable to the facts of the present case, where it is specifically proved that the petitioner remained silent for more than one year and complained only thereafter. The said complaint in the form of notice dated 28.12.1999 also lacked necessary details and requisite amount and it fell too short of the statutory requirements. Therefore, these judgments are not applicable to the facts of the present case. 31. Since the petitioner had failed to abide by the terms and conditions of the agreement dated 30.11.1998 and had failed to pay monthly installments, as stipulated, therefore, the order of termination of the contract does not suffer from any illegality, particularly, when the petitioner had failed to respond even to the notice of termination dated 19.1.2000. As has been discussed above, the petitioner himself was responsible for not extracting the sand from the licensed land and for his failure to comply with the provisions of Clause 27 of the agreement dated 30.11.1998.” 32. However, the demand made by the respondents for the installments for the period from 10.3.2000 to 7.4.2000 is not justified (as the petitioner was denied the right to extract sand after terminating his contract vide order dated 9.3.2000. The respondents alleged that the petitioner had been extracting sand upto 7.4.2000, but since he had no right to do so after 10.3.2000, therefore, the claim made by the respondents for the contract money or interest thereon for this period is not legally justified and is set aside. 33. Leamed counsel for the respondent submitted that the petitioner is not entitled to interest, as it was specifically stated in Clause 19 of the agreement dated 30.11.1998 that no interest was payable on the amount of security. This Clause reads as under: “19. Security deposits shall carry no interest: The security deposited by the contractor/contractors shall not carry any interest. It shall not carry any interest. It shall be refunded to the contractor within three months from the date of expiry or sooner determinations of the contract.” 34. This submission was rebutted by the learned counsel for the petitioner. It was submitted that this condition is against the public policy and cannot be sustained. I find merit in this submission. The respondents themselves have been charging interest on the monthly installments. This submission was rebutted by the learned counsel for the petitioner. It was submitted that this condition is against the public policy and cannot be sustained. I find merit in this submission. The respondents themselves have been charging interest on the monthly installments. They have been charging interest even on the delayed payments but they cannot deny interest on the amount of security retained by them, which was adjustable or returnable after the expiry of the contract period for more than 2-1/2 years. No doubt, the bank rates of interest have come down, but still the petitioner would be entitled to the reasonable rate of interest particularly, when the respondents have retained the amount of the petitioner. Accordingly, Clause 19 of the agreement dated 30.11.1998 is held as unsustainable in law and the petitioner is awarded interest @ 9% from the date of its deposit till the date of adjustment of the security amount or its repayment. 35. Keeping in view the discussion held above, the petitioner has failed to prove if the respondents had failed to discharge their statutory obligations. It is rather the petitioner who failed to function in accordance with the terms and conditions of the agreement dated 30.11.1998. Therefore, the petition stands partly allowed in the following terms, i.e the contract money and interest thereon for the period from 10.3.2000 to 7.4.2000 cannot be charged by the respondents from the petitioners as the contract had come to an end. on 9.3.2000. However, the petitioner would be liable to pay the contract amount up to 9.3.2000 in terms of the contract agreement dated 30.11.1998. The petitioner would also be entitled to interest @ 9% on the security amount of Rs.37 lacs from the date of its deposit till it is adjusted against the amount which was outstanding against him as on 9.3.2000 or returned. If any amount is found recoverable from the petitioner, the same would be recovered in accordance with law but if the amount paid by the petitioner is found in excess, the same would be refunded by the respondents to the petitioner forthwith. The petition with regard to the remaining claims is dismissed.