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TMI Blog2012 (3) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No. 1 Ghanshyam Mohta and father-in-law of respondent No. 2 Smt. Kamla Devi), Municipal Committee of Nagpur (for short, the Committee ) passed resolution dated 17.3.1944 for grant of lease to him in respect of the plot described herein above for a period of 30 years. In furtherance of that resolution, lease deed dated 28.10.1944 was executed in favour of Gopaldas Mohta. The tenure of lease commenced from 17.3.1944. For the sake of convenient reference, Clauses 6 and 8 of the lease deed are extracted below: 6. The lessee shall upon every assignment of the said land or any part thereof within a calendar month thereafter deliver to the lessor or to such person as he may appoint in this behalf a notice of such assignment putting forth the names and description of the parties thereto and the particulars and effect thereof. 8. The Municipal Committee i.e. the lessor will have the option to retake structure at end of the term of 30 years hereby granted by paying the then market value of the structure or to renew the lease on the revised ground rent, fair and equitable, for a further term of 30 years or more. Provided also that every such rene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quire the interests of the lessor, as provided in Clause (5) below, the lessees shall be entitled to all the rights and interest of the lessor under the said clause for renewal, together with all other interests which the lessor may have under the lease before mentioned, dated 17th March, 1944 including the right of renewal, therein mentioned. 5. The lessees shall have the option to pay to the lessor a sum of ₹ 90,000/- (Rupees Ninety Thousand only) at any time during the first five years of the lease and to purchase all the rights of the Lessor under said Head Lease from the Municipal Committee, Nagpur, together with his rights over the plinth and the material and on this amount being paid as per this conditions, the lessor shall be bound to execute the necessary assignment or other assurance in favour of the lessees at the cost and expenses of the lessees. The lessees shall have also the option to acquire the said interest from the lessor at any time, on payment of the same price, namely ₹ 90,000/- only during the last year before the expiry of the lease by afflux of time. 10. On expiry of the lease in due course, the lessees shall hand over the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irs of Parmanand Mundhada and respondent No.2 and the Corporation respectively. The relevant portions of the High Court s judgment dated 25.7.1991 are extracted below: 20. To this letter (Exh. 98) a reminder was sent on 15th February 1974 after a gap of one year. That letter is Exh. 99. That letter is addressed to defendant no. 1 Parmanand by the Counsel of the plaintiff. It makes an interest reading. It is hence extracted as a whole. It reads as under:- Dear Sir, Under instructions of my clients M/s Saroj Screens Pvt. Ltd., I have to invite your attention to their registered letter dated 15.1.1973 received by your on 19.1.1973. My client has not received any reply so far. 2.Please let me know whether you have applied to the Municipal Corporation, Nagpur for renewal of the lessor whether you want to apply for renewal of the lease. If you have applied, what is the result of your application. 3.My client has been ever ready and willing to perform his part of the contract under the Indenture dated 10.9.1947 with Diwan Bahadur Seth Gopaldas Mohta, by which you are bound. 4.Please note that if you do not sent any satisfactory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 3,000/- for breach of the conditions embodied in lease deed dated 28.10.1944. The relevant portions of Resolution dated 29.10.1975 are reproduced below: Resolution No. 162: The term of the 30 years lease of plot no. 5 situated on Geeta Ground, Sitabuldi, where upon Anand Talkies is situate has expired on 16.3.1974. The present owner of that plot viz Shri Parmananddas Kisandas Mundhada, resident of 55/58 Isra Street, Calcutta, having made an application on 7.3.1974 for renewal or lease for further 30 years, the house took into consideration the said request. xxx xxx xxx With regard to the subject under consideration, the Hon'ble Members have made a request that the House should give information to them regarding the notes made by way of amendment by the Municipal Commissioner. The Hon'ble Mayor has suggested that the Municipal Commissioner should clarify about the amended notes. Accordingly the Hon'ble Municipal Commissioner made clarification about his notes made on 17.10.1975 in details. xxx xxx xxx After that discussion, as mentioned in the notes of the Hon'ble Municipal Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease in favour of the appellant for a period of 30 years commencing from 16.3.1991 subject to the condition of payment of ground rent at the rate of ₹ 20,000/- per annum. That resolution reads as under: Resolution No. 137: Since Messrs Saroj Screen Private Limited has been paying from time to time ground rent of the land and the land and building thereon are in possession of the Saroj Screen Private Limited, there should be no objection for mutation of the land in their name. Messrs Saroj Screen Private Limited, has by written letter guaranteed to pay ₹ 15,000/- per year by way of ground rent of the land. Therefore, as by way of resolution dated 29.10.1975, bearing no. 162, the Nagpur Municipal Corporation has fixed the ground rent at ₹ 13,120/- per year and ₹ 15,000/- by way of ground rent is being paid, which is more than ground rent of ₹ 13,120/- which is fixed, there will be no kind of financial loss of the Corporation. M/s Saroj Screen Private Limited had paid the amount of ground rent of ₹ 2,12,529.60 for the period 16.3.1984 to 25.3.1991. Therefore, the House has taken into consideration the resolution renewal of lease for 30 ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be decided by the High Court under Article 226 of the Constitution. On merits, it was pleaded that assignment deeds dated 2.9.1985 are not binding on the Corporation because it had not been apprised about the transfer of leasehold rights by the heirs of Parmanand Mundhada in favour of respondent nos. 1 and 2. 3.12 At this stage, it will be appropriate to mention that during the pendency of Writ Petition No.1613 of 1992, respondent nos.1 and 2 filed Special Civil Suit No.1135 of 1993 for eviction of the appellant, possession of the suit property and recovery of damages by alleging that Resolution dated 28.8.1991 was illegal and without jurisdiction and lease deed dated 4.9.1991 executed in favour of the appellant did not create any rights in its favour. 3.13 After filing the written statement in Writ Petition No.1613 of 1992, the Corporation passed Resolution dated 22.7.1996 and cancelled the lease granted to the appellant on the ground that previous sanction of the State Government had not been obtained as per the requirement of Section 70(5) of the Act. The appellant questioned this action of the Corporation in Writ Petition No.1786 of 1996. By an inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Corporation to the maintainability of the writ petition by relying upon the judgments of this Court in D.F.O., South Kheri v. Ram Sanehi Singh (1971) 3 SCC 864 and S.J.S. Enterprises (P) Ltd. v. State of Bihar (2004) 7 SCC 166. The Division Bench held that when a public authority is said to have acted in violation of the statutory provisions, the Court can grant relief to the aggrieved person and the availability of the alternative remedy does not operate as a bar. The Division Bench further held that respondent nos. 1 and 2 cannot be held guilty of suppressing the factum of filing suit for eviction because the first writ petition had been instituted much before filing the suit. While dealing with the challenge to Resolution dated 28.8.1991 and the decision of the State Government to accord sanction under Section 70(5), the Division Bench opined that during the subsistence of Resolution dated 29.10.1975, the Corporation could not have granted lease in favour of the appellant and the State Government had no right to validate such grant. However, the prayer of respondent nos. 1 and 2 for issue of a direction to the Corporation to implement Resolution dated 29.10.1975 was rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of this Court in Damodhar Tukaram Mangalmurti v. State of Bombay AIR 1959 SC 639 and argued that failure of the Corporation to resume the plot after paying market value of the structure leads to an irresistible inference that the Corporation had decided to renew the lease and, as a matter of fact, Resolution dated 29.10.1975 was passed to that effect. Shri Naphade laid considerable emphasis on the fact that in terms of Clause 8 of lease deed dated 28.10.1944, the Corporation could have made fair and equitable revision of the ground rent and argued that there was no justification for 10 times increase in the ground rent necessitating filing of an appeal by Parmanand Mundhada. 6. Before dealing with the arguments of the learned counsel, we consider it necessary to make the following observations: i) Although, the appellant has not disputed that in the partition, which took place in 1959 in the family of Gopaldas Mohta, the plot in question came to the share of his wife Smt. Gangabai and that she had executed assignment deed dated 12.8.1960 in favour of Parmanand Mundhada, it has not placed on record copies of the partition deed and assignment deed so as to enabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear before expiry of the lease by efflux of time. The appellant did exercise option for renewal of lease by sending letter dated 15.1.1973 to Parmanand Mundhada subject to the condition of renewal of lease by the Corporation. After some time, the appellant filed Special Civil Suit No.96/1974 for specific performance, which was decreed by the trial Court vide judgment dated 28.4.1980. However, the appellant s joy proved to be short-lived because in the appeals filed by the heirs of Parmanand Mundhada and respondent No. 2 and the Corporation, the High Court reversed the judgment of the trial Court and dismissed the suit by observing that the appellant could not prove its readiness or willingness to implement the contract. The appellant did not challenge the judgment of the High Court by filing a petition under Article 136 of the Constitution. Therefore, the finding recorded by the High Court on the tenability of the appellant s claim, which was primarily founded on Clause 5 of lease deed dated 10.9.1947, will be deemed to have become final and the appellant cannot now rely upon the terms and conditions of lease deed dated 10.9.1947 for contending that the Corporation was bound to ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of fishing or of gathering and taking fruit, flowers and the like, of which the premium of rent, as the case may be, does not exceed [One Lakh] rupees for any period not exceeding twelve months at a time : [Provided that every such lease granted by the Commissioner other than a lease of a class in respect of which the Standing Committee has by resolution exempted the Commissioner from compliance with the requirements of this proviso, shall be reported by him to the Standing Committee within fifteen days after the same has been granted;] (b) With the sanction of the Standing Committee the Commissioner may dispose of by sale or otherwise, any such right as aforesaid, for any period not exceeding three years at a time of which the premium or rent or both, as the case may be, for any one year does not exceed [One lakh] rupees; (c) With the sanction of the Corporation, the Commissioner may lease, sell or otherwise convey any immoveable property belonging to the Corporation. (3) The Commissioner may - [(a) .] (b) with the sanction of the Standing Committee, dispose of by sale or otherwise any moveable property belonging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, but in our constitutional scheme compliance of the doctrine of equality enshrined in Article 14 of the Constitution has to be read as a condition precedent for exercise of power by the State Government and the Corporation, more so, when it relates to alienation of public property or any right or interest therein. In this context, it is necessary to emphasis that the Corporation holds the property as a trustee of the public and any alienation of such property or any right or interest therein otherwise than by way of auction or by inviting bids would amount to breach of that trust. 11. The concept of the 'State' as it was known before the commencement of the Constitution and as it was understood for about two decades after 26.1.1950 has undergone drastic change in recent years. Today, the State cannot be conceived of simply as a coercive machinery wielding the thunderbolt of authority. Now the Government is a regulator and dispenser of special services and provides to the large public benefits including jobs, contracts, licences, quotas, mineral rights etc. The law has also recognised changing character of the governmental functions and need to protect individ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nor is it confined to the sphere of administration: it operates wherever discretion is given for some public purpose, for example where a judge has a discretion to order jury trial. It is only where powers are given for the personal benefit of the person empowered that the discretion is absolute. Plainly this can have no application in public law. For the same reasons there should in principle be no such thing as unreviewable administrative discretion, which should be just as much a contradiction in terms as unfettered discretion. The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal. It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere. 13. In Padfield v. Minister of Agriculture, Fishery and Food (1968) A.C. 997, the Court was called upon to decide whether the Minister had the prerogative not to appoint a Committee to investigate the complaint made by the members of the Milk Marketing Board that majority of the Board had fixed milk prices in a way which was unduly unfavourab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of India (1979) 3 SCC 489, Erusian Equipment and Chemicals Ltd. v. State of W.B. (1975) 1 SCC 70, Kasturi Lal Lakshmi Reddy v. State of J K (1980) 4 SCC 1, Common Cause v. Union of India (1996) 6 SCC 530, Shrilekha Vidyarthi v. State of U. P. (1991) 1 SCC 212, LIC v. Consumer Education Research Centre (1995) 5 SCC 482, New India Public School v. HUDA (1996) 5 SCC 510, the Court culled out the following propositions: What needs to be emphasised is that the State and/or its agencies/instrumentalities cannot give largesse to any person according to the sweet will and whims of the political entities and/or officers of the State. Every action/decision of the State and/or its agencies/instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well-defined policy, which shall be made known to the public by publication in the Official Gazette and other recognised modes of publicity and such policy must be implemented/executed by adopting a non-discriminatory and non-arbitrary method irrespective of the class or category of persons proposed to be benefited by the policy. The distribution of largesse like allotment of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l under Section 397(3) read with Section 411 against increase in the ground rent and the imposition of penalty. However, nothing has been said about the fate of that appeal. If Parmanand Mundhada, his heirs or respondent Nos.1 and 2 felt that the disposal of the appeal has been unduly delayed then they could have filed a writ for issue of a mandamus directing the appellate authority to decide the appeal within a specified period but no such step is shown to have been taken by either of them. Therefore, we are constrained to take the view that Resolution dated 29.10.1975 had become redundant and the same can no longer be relied upon by respondent Nos.1 and 2 for claiming any right or interest in the plot. 18. The ratio of the judgment in Damodhar Tukaram Mangalmurti v. State of Bombay (supra) which has been relied upon by Shri Naphade has no bearing on this case. The question which came up for consideration in that case was whether Civil Court has the jurisdiction to decide the issue of fair and equitable enhancement of the annual rent. The facts of that case were that the then Provincial Government of the Central Provinces and Berar, Nagpur devised a scheme to extend resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by them, respondent Nos.1 and 2 did not question ten times increase in the rent payable by the lessee. 20. The argument of Shri Shekhar Naphade, learned senior counsel for respondent Nos.1 and 2 that the Corporation is bound to renew the lease granted to his clients in terms of Section 116 of the Transfer of Property Act, 1882 because the plot in question remained in their possession through the appellant also merits rejection. The reason for this conclusion is that no evidence was produced before the High Court to show that the appellant was continuing in possession with the consent of Parmanand Mundhada, his heirs or respondent Nos.1 and 2. Rather, it was their pleaded case that after expiry of the period specified in lease deed dated 10.9.1947, the appellant did not have any right to continue in possession. 21. We are also of the view that Resolution dated 29.10.1975 though passed in consonance with Clause 10 of lease dated 28.10.1944, has to satisfy the test of reasonableness, equality and fairness. Though, the initial lease was granted to Gopaldas Mohta before coming into force of the Constitution, while considering the issue of renewal of lease the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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