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2013 (2) TMI 870 - SC - Indian LawsPower of RIICO authority to cancel the alloted land - Obligation on the part of RIICO to provide access to road - Lease deed executed with a clear stipulated time to develop land in 5yrs - failure to fulfill the conditions may amount to recover its possession - Writ of Mandamus Whether a person can directly seek writ petition before applying any other remedies available to him in leese deed - HELD THAT - It is a settled law that writ does not lie merely because it is lawful to do so. A person may be asked to exhaust the statutory/alternative remedy available to him in law. Whether the matters/disputes relating to contract can be enforced through writ jurisdiction under Article 226 of the Constitution . - HELD THAT - the court should not exercise its writ jurisdiction to enforce the contractual obligation. The primary purpose of a writ of mandamus, is to protect and establish rights and to impose a corresponding imperative duty existing in law.Thus, the writ does not lie to create or to establish a legal right, but to enforce one that is already established. Whether RIICO had authority to cancel the alloted land by not providing access to road . - HELD THAT - The State of Rajasthan had acquired the land in exercise of its eminent domain and transferred the same to the appellant-RIICO after receiving the consideration amount and executed the lease deed in its favour. The State exercised its power in transferring the land to RIICO under the Rules 1959. However, further allotment by RIICO to the respondent-company was under the Rules 1979. Rule 11-A of the Rules 1959, as amended created a legal fiction by which the respondent-company had become a lessee and the State of Rajasthan, the lessor and RIICO had no authority whatsoever, to cancel the allotment of land made in favour of the respondent-company, since it was only the State of Rajasthan that had the authority to cancel the said allotment; by not providing for an access road, the purpose for which allotment was made by RIICO stood defeated, and this was what had resulted in the delay of the development of the said land, and in such a fact-situation, cancellation of land was not permissible; there was a constructive obligation on the part of the appellant-RIICO to provide an approach road with respect to the land which was allotted; and that RIICO had failed to co-operate with the respondent-company to accomplish the task it had undertaken.therefore, the entire project was to be completed within a period of five years. that construction was just made on the fraction of the entire land.the lessee will not transfer nor sub-let nor relinquish rights without prior permission from the appellant. However, it is evident that the respondent-company had negotiated with a third party for development of the land.
Issues Involved:
1. Obligation to provide an approach/access road. 2. Interpretation of the lease agreement. 3. Applicability of Rule 11-A of the Rajasthan Land Revenue (Industrial Area Allotment) Rules, 1959. 4. Jurisdiction and competence of RIICO to cancel the lease. 5. Legal principles: Approbate and Reprobate, Mutatis Mutandis, Contractual disputes in writ jurisdiction, Interpretation of contract terms, "As-is-where-is" clause, and "As if" clause. Detailed Analysis: Obligation to Provide an Approach/Access Road: The appellant argued that the land was allotted on an "as-is-where-is" basis, and there was no obligation to provide an access road. The lease deed stipulated that the lessee (respondent-company) was responsible for creating its own infrastructure, including the access road. The High Court's direction to provide the access road was contrary to the lease terms, which allowed RIICO to collect charges if it provided the road but did not obligate it to do so. Interpretation of the Lease Agreement: The lease deed contained clear terms that the land was allotted on an "as-is-where-is" basis, and the lessee was to develop its infrastructure. The High Court's interpretation, which imposed an obligation on RIICO to provide the road, was inconsistent with the lease agreement. The Supreme Court emphasized that a contract must be interpreted according to its literal terms unless there is ambiguity, and courts cannot create new obligations not agreed upon by the parties. Applicability of Rule 11-A of the Rajasthan Land Revenue (Industrial Area Allotment) Rules, 1959: The High Court misinterpreted the amendment to Rule 11-A, which allowed the respondent-company to sub-lease the land. The amendment did not transfer the title or interest from RIICO to the State Government. The rule was intended to facilitate sub-leasing by the respondent-company, not to divest RIICO of its rights. The Supreme Court clarified that the terms "mutatis mutandis" and "as if" in the rule were meant to apply certain conditions to sub-leases without altering the fundamental rights and obligations of RIICO. Jurisdiction and Competence of RIICO to Cancel the Lease: The High Court held that RIICO had no jurisdiction to cancel the lease after the amendment to Rule 11-A. However, the Supreme Court found that RIICO retained its rights and title to the land and had the authority to cancel the lease for non-compliance with the lease terms. The cancellation was justified as the respondent-company failed to complete the project within the stipulated time, completing only 10% of the construction. Legal Principles: 1. Approbate and Reprobate: The doctrine of estoppel by election prevents a party from accepting benefits under a contract while denying its validity. The respondent-company accepted the lease terms and could not later challenge them. 2. Mutatis Mutandis: This principle implies that provisions apply with necessary changes in detail. The amendment to Rule 11-A applied certain conditions to sub-leases without altering RIICO's fundamental rights. 3. Contractual Disputes in Writ Jurisdiction: Disputes arising from contract terms are generally not enforceable through writ jurisdiction. The proper forum for such disputes is civil court or arbitration, as provided in the contract. 4. Interpretation of Contract Terms: Contracts must be interpreted according to their literal terms. Courts should not create new obligations not agreed upon by the parties. 5. "As-is-where-is" Clause: This clause means the lessee accepts the property in its current condition and is responsible for any necessary improvements or infrastructure. 6. "As if" Clause: This legal fiction is used to apply certain conditions as if they were stipulated in the original agreement, without altering the fundamental nature of the contract. Conclusion: The Supreme Court allowed the appeals, setting aside the High Court's judgment. The order of cancellation of the lease by RIICO was restored, and the respondent-company's writ petitions were dismissed. The Court emphasized the importance of adhering to the literal terms of the contract and the proper jurisdiction for resolving contractual disputes.
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