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Issues Involved:
1. Applicability of Section 65 of the Indian Contract Act. 2. Legality of the mining lease under the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949. 3. Applicability of Sections 70 and 72 of the Indian Contract Act. Issue-wise Detailed Analysis: 1. Applicability of Section 65 of the Indian Contract Act: The core issue was whether Section 65 of the Indian Contract Act applied to the case. Section 65 states: "When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it." The court clarified that the section makes a distinction between an agreement and a contract. An agreement not enforceable by law is void, whereas a contract is an agreement enforceable by law. The section applies when an agreement is discovered to be void or when a contract becomes void due to subsequent events. However, it does not apply if both parties knew from the beginning that the agreement was unlawful and therefore void. The court concluded that since the plaintiff was already in the mining business and had legal counsel, they should have been aware of the illegality of the lease agreement from the start. Thus, Section 65 did not apply. 2. Legality of the Mining Lease under the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949: The lease was granted on September 7, 1950, after the Mineral Concession Rules came into force on October 25, 1949. Section 4 of the Mines and Minerals (Regulation and Development) Act, 1948, states that no mining lease shall be granted except in accordance with the rules made under the Act, and any lease granted contrary to this provision is void. Rule 45 of the Mineral Concession Rules, 1949, required a certificate of approval from the Provincial Government, which the plaintiff did not have. Rule 49 prohibited charging any premium in addition to specified fees and rents, but the lease included a premium payment. Therefore, the lease was void ab initio as it violated the Act and the Rules. 3. Applicability of Sections 70 and 72 of the Indian Contract Act: Sections 70 and 72 were also considered. Section 70 pertains to the obligation to compensate for benefits received under non-gratuitous acts, and Section 72 deals with the obligation to return money paid under a mistake or coercion. The court found that the payment of Rs. 80,000 was not made lawfully, nor was it done under a mistake or coercion. The plaintiff should have been aware of the illegality of the agreement when it was entered into. Therefore, neither Section 70 nor Section 72 applied to the case. Conclusion: The appeal was dismissed, as the plaintiff was not entitled to relief under Section 65 of the Indian Contract Act, and the lease was void under the Mines and Minerals (Regulation and Development) Act, 1948, and the Mineral Concession Rules, 1949. Sections 70 and 72 of the Indian Contract Act were also not applicable. The appeal was dismissed without costs.
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