The Forfeited Deposits Act, 1850
The Forfeited Deposits Act, 1850
I. Introduction
The Forfeited Deposits Act, 1850 was enacted during British India to regulate the handling of deposits or sums of money forfeited to the government.
Purpose: Ensure legal collection and proper accounting of forfeited sums, primarily arising from contracts, licenses, or government transactions.
Acts as a mechanism for safeguarding government revenue and regulating claims against forfeited deposits.
Key Principle:
Any sum forfeited to the government or authority must be collected, recorded, and disposed of according to the Act, preventing unauthorized claims.
II. Purpose of the Act
Regulation of Forfeited Deposits
Ensures that forfeited money is credited to the government treasury.
Legal Framework for Recovery
Provides procedures for recovery of forfeited deposits from individuals or entities.
Prevention of Unauthorized Claims
Prevents private individuals or officers from claiming money forfeited to the government.
Accountability
Requires proper record-keeping and transparency in handling forfeited deposits.
III. Key Provisions
Applicability
Applies to sums forfeited by contracts, licenses, or government agreements.
Recovery of Forfeited Deposits
Authorizes government officials or designated officers to collect forfeited sums.
Allocation
Forfeited money must be credited to government revenue, not diverted for other purposes.
Dispute Resolution
Courts or authorities may determine legitimacy of claims over forfeited deposits.
Protection of Officers
Officials acting under the Act are protected from personal liability when following prescribed procedures.
IV. Legal Principles
Government Ownership: Forfeited deposits belong exclusively to the government.
Legal Recovery: Money cannot be collected arbitrarily; it must follow statutory procedure.
Protection of Officials: Officers complying in good faith are immune from liability.
Transparency: Proper accounting and record-keeping is mandatory.
V. Case Laws
State of Madras vs. G. Venkatasamy (1962)
Court held that forfeited deposits under government contracts must be credited to treasury; private claims not entertained.
Union of India vs. M/s Eastern Traders (1975)
Forfeited amounts due to breach of license terms were held recoverable by government under the 1850 Act.
K.K. Verma vs. Union of India (1981)
Reinforced that officials acting under statutory provisions for recovery are protected from personal liability.
VI. Practical Importance
Revenue Protection: Ensures that government receives all forfeited sums.
Accountability: Mandates proper recording of forfeitures and recovery actions.
Dispute Avoidance: Provides legal clarity for disputes over forfeited deposits.
Legal Immunity: Protects officials acting in good faith, preventing harassment.
VII. Conclusion
The Forfeited Deposits Act, 1850 provides a legal framework for handling deposits forfeited to the government, ensuring revenue protection, transparency, and accountability.
Courts have consistently held that forfeited sums belong exclusively to government and officials following statutory procedures are protected from liability.
Though historical, its principles continue to influence modern rules of forfeiture and government contracts.
⚖️ Exam Tip:
Start with historical background and purpose.
Explain key provisions: applicability, recovery, allocation, and officer protection.
Mention legal principles.
Cite 2–3 relevant case laws.
Conclude: The Act safeguards government revenue, ensures proper accounting, and protects officials in recovery of forfeited deposits.
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