Lalan Kumar vs The State Of Bihar on 15 July, 2026

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    Patna High Court

    Lalan Kumar vs The State Of Bihar on 15 July, 2026

    Author: Sandeep Kumar

    Bench: Sandeep Kumar

              IN THE HIGH COURT OF JUDICATURE AT PATNA
                       Civil Writ Jurisdiction Case No.17389 of 2024
         ======================================================
         Lalan Kumar, son of late Mahendra Rai, Resident of Chitarchak, P.O. -
         Pahleja Badka, P.S.- Sonepur, District - Saran.
    
                                                                                ... ... Petitioner
                                                  Versus
    
    1.   The State of Bihar through the Principal Secretary, Mines and Geology
         Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna.
    2.   The Principal Secretary Cum Mines Commissioner, Mines and Geology
         Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna.
    3.   The Director, Mines and Geology Department, Government of Bihar, Vikas
         Bhawan, Bailey Road, Patna.
    4.   The District Magistrate Cum Collector, Patna.
    5.   The District Mining Officer, Patna.
    
                                                   ... ... Respondents
         ======================================================
         Appearance :
         For the Petitioner        :         Mr. Suraj Samdarshi, Advocate
                                             Mr. Avinash Shekhar, Advocate
                                             Ms. Simran Kumari, Advocate
                                             Ms. Abhilasha Jha, Advocate
         For the State          :            Mr. Surya Deo Yadav, AAG-9
         For the Mines Department:           Mr. Naresh Dikshit, Spl. P.P.
                                             Mr. Brij Bihari Tiwari, Advocate
                                             Ms. Shruti Singh, Advocate
         ======================================================
         CORAM: HONOURABLE MR. JUSTICE SANDEEP KUMAR
                             C.A.V. JUDGMENT
                                          Date : 15-07-2026
    
                              By way of this writ petition, the petitioner has
    
          prayed for the following reliefs:-
    
                               "i. To issue an appropriate writ, order or
                                       direction in the nature of mandamus
                                       commanding the Respondents to refund
                                       the proportionate royalty amount for a
                                       period of 77 days during which the
                                       petitioner was precluded from conducting
                                       mining activity at Sand ghat No.06, Patna
     Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
                                               2/19
    
    
    
    
                                     on account of restriction imposed by the
                                     Respondent on generation of e-transit
                                     challans     and      also   on       account    of
                                     restriction imposed by SEIAA contrary to
                                     the terms of the NIT and Agreement or to
                                     alternatively extend the settlement period
                                     by 77 days.
                              ii.    This Hon'ble Court may adjudicate and
                                     hold that the action of the Respondent
                                     Authorities in not granting proportionate
                                     remission in royalty for the period during
                                     which the petitioner was restrained /
                                     prohibited       from     conducting       mining
                                     activity for absolutely no fault on its part,
                                     is completely illegal, arbitrary and non-
                                     est in the eyes of law.
                              iii. This Hon'ble Court may further adjudicate
                                     and hold that according to Rule 51(4) of
                                     Bihar Minerals (Concession, Prevention
                                     of Illegal Mining, Transportation and
                                     Storage)     Rules,     2019,     a    settlee   is
                                     obligated to pay royalty only for mineral
                                     "extracted" and "removed" by it.
                              iv.    This     Hon'ble        Court     may      further
                                     adjudicate and hold that the action of the
                                     Respondents in obtaining the entire
                                     amount of royalty and not allowing the
                                     petitioner to conduct mining activity
                                     amounts to unjust enrichment.
                              (v)    To grant any other relief or reliefs which
                                     the Petitioner may be found entitled to in
                                     the facts and circumstances of the case."
     Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
                                               3/19
    
    
    
    
                             2.      The brief facts of this case are that in the
    
             year 2022, the respondents floated an N.I.T. for settlement of
    
             sand ghats within the district of Patna for a period of five years.
    
             The petitioner participated in the auction which was held on
    
             17.10.2022

    and emerged as the highest bidder for Sand Ghat

    No.06 after quoting Rs.35,40,67,200/-. The reserve price of the

    SPONSORED

    aforesaid sand ghat was Rs.11,06,46,000/- and the earnest

    money deposit (EMD) was Rs.2,76,61,500/-. The petitioner paid

    the differential security deposit of Rs.6,08,55,300/- on

    20.10.2022 and thereafter an in-principal work order was issued

    in favour of the petitioner vide letter dated 08.11.2022.

    Thereafter, the petitioner applied for grant of environmental

    clearance, which was granted by the State Environment Impact

    Assessment Authority, Bihar (SEIAA) on 20.10.2023 and

    consequent thereto, an agreement was entered into between the

    petitioner and the Mining Department. The Collector vide letter

    dated 29.11.2023 permitted the petitioner to commence mining

    at the said sand ghat.

    3. It is the case of the petitioner that in

    February, 2024 a condition was imposed by the officials of the

    mining department to the effect that a settlee could not generate

    e-transit challans for more than 150-160 vehicles per day and
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    this restriction was irrespective of the quantum of sand being

    transported on the said vehicles, rather the restriction was

    imposed on the number of vehicles itself.

    4. It is further the case of the petitioner that

    under Rules 39 and 43 of the Bihar Mineral (Concession,

    Prevention of Illegal Mining, Transportation and Storage) Rules,

    2019, transportation of sand is permissible only through valid e-

    transit challans. As the petitioner was allowed to generate only

    150-160 challans per day, it was effectively prevented from

    transporting and selling sand beyond that limit and therefore, it

    is the case of the petitioner that, the said restriction caused

    substantial financial loss to the petitioner. Accordingly, the

    petitioner, vide representation dated 01.04.2024, requested the

    Director, Mines and Geology, to increase the daily limit of e-

    transit challans but no action was taken upon the representation

    of the petitioner. Therefore, the petitioner submitted a

    representation dated 18.04.2024 to the Collector, Patna for

    increasing the slot limit of the petitioner but no steps were taken

    and therefore, the petitioner continued to suffer monetary loss

    on a daily basis. Finally, the petitioner vide letter dated

    04.05.2024, surrendered the settlement of the sand ghat

    indicating the reasons to be the slotting system introduced by
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    the mining department.

    5. It is further the case of the petitioner that

    because the NIT and Agreement contemplated suspension of

    mining only during July, August and September, the subsequent

    condition imposed by SEIAA extending the suspension from

    mid-June to mid-October, as communicated by the Director,

    Mines vide Memo No. 2374 dated 14.06.2024, curtailed the

    mining period of the petitioner by an additional period of one

    month. Further, the restriction on generation of mining challans

    continued till 15.06.2024, after which excavation was

    completely stopped. It is further the case of the petitioner that

    since the sand could only be sold from the secondary loading

    area, the delay in providing the requisite ID and password till

    05.07.2024 on the part of the respondents, prevented the

    petitioner from selling sand from 16.06.2024 to 04.07.2024.

    Besides this, generation of e-transit challans was also

    intermittently stopped/restricted by the Mining Department,

    causing further disruption. It is also the case of the petitioner

    that he had filed several representations before the respondent

    authorities but all of which have remained unanswered and no

    substantial steps were taken in this regard.

    6. Learned counsel for the petitioner, at the
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    outset, submits that the petitioner was precluded from carrying

    out mining activity for 77 days for no fault of his own and

    therefore he deserves to be refunded the proportionate royalty

    amount for the aforesaid period of 77 days during which he

    could not carry out the mining activity. The learned counsel for

    the petitioner has drawn strength from the decisions of the

    Hon’ble Supreme Court in the case of Jai Durga Finvest (P)

    Ltd. vs. State of Haryana & Ors. reported as (2004) 3 SCC 381

    and the observations of the Hon’ble Supreme Court in the case

    of Chitra v. State of Kerala, reported as (2016) 1 SCC 685.

    7. Learned counsel for the petitioner further

    submits that the action of the respondent in imposing the

    restriction on the generation of e-challans mid-way of the sand

    ghat lease settlement is arbitrary and the petitioner could not be

    saddled with the loses on account of such arbitrary policy. The

    petitioner had paid more than three times the reserve price for

    the settlement of the sand ghat, however, against 15.49 Lakh

    M.T. of sand the petitioner could only excavate about 9.49 Lakh

    M.T. of sand, therefore, the petitioner was precluded from

    excavating about 6 Lakh M.T. of un-utilized sand capping. It is

    further submitted that at the cost of approximately Rs.288.57

    per M.T. the petitioner, has therefore, suffered a substantial loss
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    for no fault of his own.

    8. Lastly, it has been submitted by learned

    counsel for the petitioner that the action of the respondents in

    precluding the petitioner from operating his sand ghat and

    thereby, preventing him from excavating and removing the sand

    from his allotted sand ghat is illegal and arbitrary and the

    petitioner cannot be made to suffer monetary loss on account of

    inaction on the part of the respondents.

    9. Per contra, learned counsel for the

    answering respondents, at the outset, has submitted that the

    present writ petition is wholly misconceived and not

    maintainable since the relief claimed are flowing from a

    contractual relationship between the petitioner and the

    respondents and therefore, cannot be agitated in writ

    proceeding. It is emphasized that the petitioner after having

    emerged successful in the bidding process, voluntarily and

    willingly entered into the agreement after having accepted all

    the terms and the clauses and as such, cannot now turn around

    to seek remedies which are not contemplated under such terms

    and conditions.

    10. The learned counsel for the answering

    respondents has next submitted that the tender conditions are
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    binding in nature and the petitioners after having participated in

    the same, cannot be permitted to turn around and challenge the

    same after having accepted and acted upon the terms and

    conditions of the tender.

    11. Relying upon the decisions of the Hon’ble

    Supreme Court in the case of Rajasthan State Industrial

    Development Corporation vs. Diamond & Gem Development

    Corporation reported as (2013) 5 SCC 470 and Balaji Ventures

    Pvt. Limited vs. Maharashtra State Power General Company

    Limited & Anr. reported as 2022 SCC OnLine SC 1967, the

    learned counsel for the answering respondents have submitted

    that a party which has voluntarily entered into a contract with

    full knowledge of its terms and conditions and accepted its

    benefits by acting upon it, is estopped from later challenging the

    contractual conditions itself or seeking to avoid its

    consequences.

    12. I have considered the rival contentions of the

    parties and perused the material on record.

    13. The nucleus of the present case revolves

    around the fact that that the petitioner was precluded from

    operating the sand ghat for the reasons, which according to the

    petitioner, were not attributable to him.

    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    14. The Hon’ble Supreme Court in the case of

    Jai Durga Finvest (P) Ltd. v. State of Haryana & Ors.,

    reported as (2004) 3 SCC 381 : 2004 SCC OnLine SC 40 has

    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
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    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-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)]”

    15. Further, the Hon’ble Supreme Court in the
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
    11/19

    case of Chitra v. State of Kerala, reported as (2016) 1 SCC

    685 : 2015 SCC OnLine SC 745 has 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
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    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 decisions in R. Vijayakumar [1994
    Supp (2) SCC 47] as well as Jayadevan v.
    Board of Revenue
    [1998 SCC OnLine Ker
    209] 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
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    has already held in R. Vijayakumar [1994
    Supp (2) SCC 47], 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 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
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    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]
    which in turn was referred to in another
    Division Bench judgment in Rajagopalan
    Nair v. Commr. of Excise
    [1989 SCC
    OnLine Ker 387], 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 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
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    of payment and also additionally liable for
    payment of costs quantified at R.s 15,000
    (Rupees fifteen thousand only).

    Civil Appeal No. 4900 of 2006

    8. The facts that arise in this appeal are
    somewhat complex in comparison to
    Chitra’s foregoing appeal. The appellant
    had been granted an FL 3 licence for its
    Hotel Hackoba at Ernakulam for the
    period ending on 31-3-2001. Due to a
    dispute with its landlord it had to vacate
    its premises; and on locating to another, it
    applied for the renewal of the licence on
    26-2-2002. This was obviously for the
    immediately succeeding year 1-4-2001 to
    31-3-2002. The Excise Commissioner
    rejected the application for renewal on
    4-9-2002 on the ground that the licence
    had become defunct; a decision which was
    upheld by the State Government. In these
    circumstances, the appellant successfully
    approached the High Court of Kerala
    which issued a direction to the State
    Government to issue the licence within two
    weeks. The Single Judge simultaneously
    directed the appellant to pay the licence
    fee for the years 2001-2002 and 2002-
    2003 by his judgment dated 27-1-2003.
    The appellant preferred an appeal, and on
    the first day of its hearing, the Division
    Bench passed an ad interim order
    directing the appellant to pay Rs 15 lakhs.
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    Shortly after making this payment, on
    25-3-2003, the licence was renewed. The
    Division Bench of the High Court of
    Kerala noted Rule 14 of the Foreign
    Liquor Rules as well as the fact that it had
    not been challenged. The Division Bench
    accepted the argument of the appellant
    that for the reason that it could not utilise
    the licence for the year 2001-2002 as its
    application had been disallowed it was not
    liable to pay any fee; viz. during this
    period it was prevented by extraneous
    elements and factors from utilising the
    licence. However, the Division Bench held
    that since the licence was renewed in
    March 2003, even though the appellant
    could conduct its business for less than a
    fortnight in that licence year, nevertheless
    the appellant was liable to pay the full fee
    for the year 2002-2003. It is these
    circumstances which have constrained the
    appellant to file the present appeal before
    us.

    9. In order to eradicate any possibility of
    misunderstanding our present judgment,
    we hasten to clarify that had the
    appellant’s application for renewal of the
    FL 3 licence found approval instead of
    rejection on 4-9-2002, the appellant would
    have been liable to pay the entire fee for
    the year 2001-2002. This is so for the
    simple reason that there was no third-party
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    interference or intervention which led to
    the non-utilisation of that licence for the
    previous portion of that year; it may be
    reiterated that the appellant had to locate
    fresh premises. However, after 4-9-2002,
    the appellant cannot be held responsible in
    any way for the non-utilisation of the
    licence up to the date it was eventually
    renewed i.e. 25-3-2003.

    10. On the predication of the legal analysis and
    discussion in Civil Appeal No.2246 of
    2006 (supra), we are of the opinion that
    the appellant is only liable to pay the
    proportionate licence fee for the period in
    which it could avail of the licence, that is,
    25-3-2003 to 31-3-2003. It would be fair to
    cogitate upon whether the appellant
    should have declined the licence for
    virtually a week in that year, and since it
    failed to exercise that option, whether it
    should be burdened with the fee for the full
    year. It seems to us that any person placed
    in the position of the appellant would not
    be in a position to decline to accept the
    renewal of the licence even though it was
    for less than a fortnight, since that would
    have led to the licence being rendered
    defunct; which may have then led to
    consequence of disentitlement for grant or
    renewal of the FL 3 licence in the future.”

    16. At this juncture, this Court has noted that in
    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    C.W.J.C No.6991 of 2025, titled as ‘M/s Awanish Construction

    vs State of Bihar & Ors‘ which was decided together with the

    analogous cases, this Court had directed the respondent

    authorities to consider the representation of the petitioners

    therein and thereafter pass a reasoned and speaking order in

    light of the decision of the Hon’ble Supreme Court in the case

    of Jai Durga Finvest (P) Ltd. (supra) and the observations of

    the Hon’ble Supreme Court in the case of Chitra (supra).

    17. It is settled position of law that the petitioner

    can not be subjected to adverse civil consequence where the

    inability to exercise a statutory or contractual right is occasioned

    by the action or omission of the respondent authorities

    themselves. Consequently, where the non-utilisation of a licence

    is not attributable to the petitioner, the imposition of the full

    financial burden would be arbitrary and inequitable, and the

    petitioner should be entitled to proportionate remission.

    18. In these circumstances, the petitioner is

    directed to approach the respondent authorities for appropriate

    calculation of the refund of the proportional royalty amount for

    the period during which he was precluded from the mining in

    the sand ghat settled in his favour, for reasons not attributable to

    him.

    Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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    19. If such a representation is filed, the same

    shall be considered and decided by the respondent authorities

    within a period of eight weeks from the date of filing of such a

    representation by the petitioner and thereafter the respondent

    authority shall pass a reasoned and speaking order in accordance

    with law after affording an opportunity of hearing to the

    petitioner. While deciding the aforesaid representation of the

    petitioner, the respondent authority shall also consider the law

    laid down by the Hon’ble Supreme Court in the case of Jai

    Durga Finvest (P)Ltd. (supra).

    20. This Writ petition is allowed in the aforesaid

    terms.

    21. Pending interlocutory applications, if any,

    also stands disposed of.

    (Sandeep Kumar, J)

    pawan/-

    AFR/NAFR                N.A.F.R
    CAV DATE                18.03.2026
    Uploading Date          20.07.2026
    Transmission Date
     



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