TMI Blog1973 (3) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... ikaner. by his letter, dated 4-7-1957 (Ex. 26). The Deputy Director (Administration) of Mines and Geology also communicated this fact to him by his letter, dated 5-7-1957 (Ex. 25). The plaintiff then deposited an amount of ₹ 1550/- by wav of security with the Assistant Mining Engineer, Bikaner. on 8th August. 1957. He also completed the other formalities regarding demarcation etc. of the area in question. By letter, dated 9-10-1957 (Ex. 5). the plaintiff was also informed to commence his work. Plaintiff Raghunath Singh further deposited ₹ 1550/- on 28th October, 1957, as another part of the security deposit amount. He also paid a sum of ₹ 1550/- on the same date as the first quarterly instalment of the dead-rent. He was then asked to execute the indenture on a duly stamped paper. The plaintiff in response to that got prepared an indenture relating to the mining lease and submitted the same duly signed by him and accompanied by necessary stamp duty. This was done in the month of January. 1958. The said indenture and its copies, duly signed by the plaintiff, are on the record. They are marked Exs. D1/1 D1/2 and D1/3. According to the plaintiff he engaged necessary s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bourers ensaeed. advances made for work which have been forfeited by them Rs. 24405/8/3 5. Application fee Rs. 5/- 6. Loss incurred on ac-count of bargain struck and contracts made with different parties for supply of lime and lime-stone i.e. the compensation the plaintiff had to pay on account of his inability to fulfil the said agreement with various parties Note:-The further details of it are as under: - a) Shri Ramiilal S/o Ramprasad of Delhi. Rs. 7500/- b) Ganpairam s/o Boduram of Alwar Rs. 500/- c) Birbal s/o Panna of Village Dhani Bha-tota Tehsil Narnaul Rs. 3531/- d) Minimum loss of profit which the plaintiff would have earned by working the said mines Rs. 25000/- Total :- Rs. 70, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Security deposit ₹ 3100/- 2. Quarterly dead rent ₹ 1550/- 3. Preliminary expenses incurred by the plaintiff in demarcation etc. ₹ 60/- 4. Application fee ₹ 5/- 5. Incidental expenses incur-red by the plaintiff ₹ 14647.75 6. Loss of profit ₹ 25000.00 The plaintiff's suit was thus decreed for ₹ 44362.75 p with proportionate costs. He was also allowed interest at the rate of 6% per annum from the date of judgment till the satisfaction of the decree. This decree is the subject matter of challenge in this appeal. 5A. On behalf of the appellant it has been urged by Mr. Tewari that there was no enforceable contract between the parties inasmuch as there was no formal instrument evidencing the contract between the Parties in accordance with the provisions of Article 299 of the Constitution. It was submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Legislature thus is subject to the limitations imposed by entry No. 54. It is not disputed that at the relevant time, there was no post Constitutional enactment. Mines and Mineral (Regulation and Development) Act, 1948, a pre-constitutional Central Act existed and that governed the regulation of mines and mineral development. According to Section 4 of this Act no mining lease could be granted after the commencement of the Act otherwise than in accordance with the rules made under the Act. Section 4 (2) provided that any mining lease granted contrary to the provisions of Sub-section (1) shall be void and of no effect. Under Section 5 of the Act of 1948, the Central Government was empowered to make rules for the granting of the mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area. The rules can also prescribe the manner, the authority and other incidental matters for granting such a lease. The Central Government in exercise of the powers conferred by Section 3 of the Act of 1948 made 'The Mineral Concession Rules, 1949'. Rule 4 of the Rules of 1949 provided that these rules shall not apply to minor minerals, the extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to grant the mining leases, but by Rule 43 of these Rules of 1955, the Government may by a notification in the Rajasthan Gazette, direct that the powers of the Government under all or any of these rules, including the power to grant quarrying licences or mining leases, may be exercised by the Director or by any other officer or officers of the Department or by other officers subject to such restrictions and for such area and within such limits, if any, as the Government may direct. by a notification the Director of Mines and Geology has been authorised to grant a mining lease. There is no controversy between the parties that the Director of Mines and Geology was a competent authority to grant the lease in question under Rule 43 (I), Rule 44 may also be referred here. It reads as under;-- 44. Effect of delegation:-- While a notification under Rule 43 is in force, an officer so exercising the Powers of the Government or the Director in accordance with the notifications shall be deemed to be the Government or the Director (as the case may be) for the relevant provisions of these rules. Reliance has been placed by Mr. Tewari on this rule in support of his contention that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case is distinguishable on facts. In the case referred to the Tehsildar allowed some land to Rameshwar Dayal in the 'abadi' in the district of Kota under the provisions of the Rajasthan Revenue Courts (Procedure and Jurisdiction) Act, 1951. A mutation to effect the transaction was recorded by the Tehsildar in Pursuance of the powers conferred upon him. This land was subsequently sought to be acquired by the State of Rajasthan some time in the year 1958 under the provisions of the Rajasthan Land Acquisition Act, 1953. Notice was also issued to Rameshwar Dayal to submit his claim for compensation. The Land Acquisition Officer awarded compensation. Rameshwar Daval not being satisfied with the award asked the Land Acquisition Officer to make a reference under Section 18 of the Land Acquisition Act. The District Judge, Kota, who heard the reference, increased the amount of compensation. It was against that order of the learned District Judge that the case came before the High Court at the instance of the State of Rajasthan. One of the objections raised by learned counsel appearing for the State was that the transfer of land effected by the Tehsildar was not in accordance with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Constitution or by any law made by Parliament upon the Union or authorities thereof. 10. On the basis of the said articles, learned counsel has submitted that the executive power of the State shall extend only to the matters with respect to which Legislature of the State has power to make laws. In this submission he obviously fails to notice the expression 'subject to the provisions of this Constitution'. Article 298 has a material bearing on this question and it is extracted below:-- 298. Power to carry on trade, etc.--The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Provided that- (a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and (b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling text books for schools unless such trade was authorised by law. The contention was rejected. Their Lordships of the Supreme Court held that so long as the trade was carried on in pursuance of the ministry's policy, with the tacit support of the majority in the legislature, no objection on the score of its not being sanctioned by a law could possibly be raised. The nature of the executive power was again considered in Jayantilal Amratlal v. F. N, Rana AIR 1964 SC 648 in connection with Article 258. Shah J. treated it as well settled that functions which did not fall strictly within the legislative or judicial field, fell in the residuary class and had to be regarded as executive and he referred to the description of executive power given by Mukherjea J. in Kapur's case AIR 1955 SC 549. He also cited the following passage from Halsbury: Executive functions are incapable of comprehensive definition, for they are merely the residue of the functions of government after legislative and judicial functions have been taken away. They include, in addition to the execution of the laws, the maintenance of public order, the management of Crown property and nationalised indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpretation of Statutes for the tests to determine whether a statutory provision was mandatory or directory and observed:-- It is clear that the Parliament intended in enacting the provision contained in Section 175(3) that the State should not be saddled with liability for unauthorised contracts and with that object provided that the contracts must show on their face that they are made on behalf of the State, i. e. by the Head of the State and executed on his behalf and in the manner prescribed by the person authorised. The provision, it appears, is enacted in the public interest, and invests public servants with authority to bind the State by contractual obligations incurred, for the purposes of the State. 14. In State of West Bengal v. B. K. Mondal and Sons: AIR 1962 SC 779 the Supreme Court followed Bhikrai's case and held that Section 175 (3) was mandatory and that failure to comply with it made the agreement invalid, which must mean in the context that it was void . The Supreme Court took the same view in the Union of India v. A. L. Rallia Ram: AIR 1963 SC 1685. 15. In a Bench decision of this Court in Tiwari Jhumarlal Swarooplal v. State of Rajasthan 1964 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnor-General of India and acceptance in Writing which is expressed to be made in the name of the Governor-General and is executed on his behalf by a person authorised in that behalf would conform to the requirements of Section 175(3). 20. Article 299 of the Constitution lays down the following requirements:-- 1. That the contract shall be expressed in writing. 2. It must be executed in the name and on behalf of the Governor, 3. By such person as he may direct or authorise and 4. In such manner as he may direct or authorise. It is true that no manner of execution of the document has been prescribed. Now, we have to see whether the remaining three requirements have been fulfilled. Ex. Dl/1 is in the standard form. This document is prepared in the name and on behalf of the Governor on the one hand and the plaintiff on the other. It has been signed by the plaintiff and his signatures are attested by the witnesses. The executant of the lease in question is the Governor. It is admitted that the Director of Mines and Geology was the person authorised to sign and to execute on behalf of the Governor. His signatures are not appended to this document. This document no doubt, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances of the case, the lease granted to the plaintiff by the Director of Mines and Geology has been cancelled for no fault of his and all these deposits were made by him in pursuance of the grant of the mining lease. He did not clearly intend to give the money to the State gratuitously. Section 70 of the Contract Act provides that where a person law- fully does anything for another Person or delivers anything to him not intending to do so gratuitously and some other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of or to restore the thing so done or delivered. In view of the facts admitted and proved, the plaintiff is entitled to the restoration of this amount under Section 70 of the Contract Act. Their Lordships of the Supreme Court in AIR 1962 SC 779 held that though an agreement is invalid. Section 70 of the Contract Act applied and the compensation can be recovered by the party who had performed his part of the agreement which the Government had accepted. Their Lordships of the Supreme Court upheld the claim under Section 70 in that case. We therefore feel justified to order the refund of ₹ 4715/- ..... 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