Statutory vesting and void government contracts: forest produce rights were extinguished, and restitution failed for lack of proof.

Statutory vesting under the abolition statute transferred all rights, title and interest in the specified estates to the State free from encumbrances, so pre-existing rights derived from grants or agreements with former proprietors, including rights to collect forest produce, were extinguished and could not be saved. A contract not complying with Article 299 of the Constitution was void and unenforceable, and estoppel or ratification could not validate it. Restitution under Section 70 of the Indian Contract Act remained possible only on proof of lawful benefit conferred and retained, but the appellant failed to establish the work done or the benefit retained by the State, so refund was denied.

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Issues: (i) Whether the appellant's pre-existing rights to collect forest produce were extinguished by the vesting provisions of the abolition statute. (ii) Whether the appellant was entitled to refund of the deposit made under a contract which did not comply with Article 299 of the Constitution, and whether relief could be claimed under Section 70 of the Indian Contract Act, 1872.

Issue (i): Whether the appellant's pre-existing rights to collect forest produce were extinguished by the vesting provisions of the abolition statute.

Analysis: On the vesting of proprietary rights under Sections 3 and 4(1)(a) of the abolition statute, all rights, title and interest in the specified estates passed to the State free from encumbrances. Rights acquired under grants or agreements with the former proprietors, including rights to collect lac and tendu leaves, were treated as proprietary rights affected by vesting and did not fall within the saving provision in Section 5. The appellant's claim was covered by the principle earlier applied to similar forest produce rights and therefore could not survive the statutory vesting.

Conclusion: The appellant's pre-existing rights stood extinguished on vesting and the claim on this issue failed.

Issue (ii): Whether the appellant was entitled to refund of the deposit made under a contract which did not comply with Article 299 of the Constitution, and whether relief could be claimed under Section 70 of the Indian Contract Act, 1872.

Analysis: A contract not made in compliance with Article 299 of the Constitution is void and cannot be enforced as a contract, and neither estoppel nor ratification can validate it. Nevertheless, where a party has lawfully conferred a benefit under such a void arrangement, Section 70 of the Indian Contract Act, 1872 may support a claim in restitution if the statutory conditions are satisfied. In the present case, the appellant failed to establish by reliable evidence the extent of work done and the benefit retained by the State, and he did not account for what he had received under the arrangement. In the absence of such proof, restitution or refund was not available.

Conclusion: The appellant was not entitled to refund or restitution on this issue.

Final Conclusion: The statutory vesting displaced the appellant's claimed forest rights, and the alternative claim for refund failed for want of proof supporting restitution. The appeal therefore did not succeed.

Ratio Decidendi: Rights to forest produce obtained from proprietors are extinguished by statutory vesting where the vesting provisions transfer proprietary rights to the State free from encumbrances, and a void governmental contract does not permit contractual enforcement, though restitution may arise under Section 70 of the Indian Contract Act, 1872 only upon proof of the statutory conditions and the benefit retained.

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