- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. NOTICE OF MOTION NO.1247 OF 2005 IN SUIT NO.1172 OF 2005 ... Vikas Kamalakar Walawalkar ...Plaintiff v/s. The Deputy Salt Commissioner and ors. ...Defendants ... Mr.Aspi Chinoy with Mr.V.R.Dhond i/b Mahimtura & Co. for the Plaintiff. Mr.B.A.Desai, Addl.S.G. with Mr.S.R.Rajguru for the Defendants. CORAM: D.K.DESHMUKH, J. DATED: 5th June, 2006 - 2 - JUDGMENT: 1. This Notice of Motion is taken out by the Plaintiff. The Plaintiff in the suit prays for a decree of declaration that the purported termination of lease/grant in respect of salt land effected by order at Exh.W made by the Defendant No.1 is illegal, wrongful and contrary to law. A further decree of declaration is also claimed declaring that the lease/grant of the salt land in terms of the supplemental Deed of Lease read with Deed of Lease is valid, subsisting and binding on the Defendants. The Plaintiff is also claiming a decree of permanent injunction directing the Defendant No.3 to make drains and sewers as would prevent the sewage water and industrial effluents flowing into the two inlets in the Plaintiff’s salt land. 2. By this Notice of Motion, the Plaintiff prays for a temporary injunction restraining the Defendants Nos. 1 & 2 from acting on the order dated 1st April, 2005 and disturbing possession of the land of the - 3 - Plaintiff pursuant to that order. 3. For the purpose of deciding this Notice of Motion following can be taken as admitted position:- (a) The suit pertains to two parcels of land. One admeasuring approximately 432 acres and the other approximately 350 acres leased under a Government Grant or demise of December 1921 to the Plaintiff’s predecessor. These two parcels of lands are known by the name "Jamasp Salt Works" and "Battiwala Salt Works". (b) The lease hold interest in respect of both the parcels of salt land have come into hands of the present Plaintiff on the same terms and conditions on which the lease was granted to the predecessor-in-title of the present Plaintiff. Supplemental Lease Deed was executed and registered on 27-7-1994 in favour of the present Plaintiff for the residual period of the lease i.e. upto 14-10-2016. (c) The salt lands have Thane creek on its eastern boundary and a range of small hillocks along the - 4 - western boundary. The Eastern Express Highway bisects the lands into two parts: (i) the portion to the west admeasures approximately 150 acres whereas the remaining lands approximately 630 acres lie on the eastern side i.e. between the Highway & Thane creek. (d) The allegation is that salt land is not being used for the purpose for which the lease was granted in relation to the lands which are to the West. 3. In April/May, 2002, show cause notices were issued in relation to both the salt lands by the Defendant No.1 alleging that a substantial portion of the leased land is not being used for manufacture of salt and has been kept fallow for a long time. It was further alleged that the Defendant No.1 has observed that the lessee has allowed gross to grow on the land and is selling the grass. It was stated that as per clause (5) of the Lease Deed, if lessee commits breach of any of the terms of the lease, the lessor can cancel the lease before expiry of the term of the lease. The lessee was, therefore, called upon to show cause why the lease should not be terminated and the land should not be resumed by the Government - 5 - of India. 4. The Plaintiff replied to the show cause notices. In the reply, it was not denied that some portion on the western side of the salt land is not being used for manufacturing salt. It was submitted that the Bombay Municipal Corporation had constructed a sewerage pumping station on the western side of the lands and the Municipal authorities are pumping out sewage water inside the Nalla passing through the said lands. As a result, during the high tide the sea water comes inside the nalla and due to overflowing of the nalla, this water gets spread inside the land on the western side, and therefore, the salt pans of the western side are rendered unproductive for the salt. It was stated that the Plaintiff has requested the Bombay Municipal authorities to take measures so that the sewage water does not come into the salt pans. In short, the reply was that the Plaintiff’s non-user of a part of the salt land on the western side for manufacturing the salt is deliberate, but the Plaintiff cannot use a part of the salt land on the western portion for manufacturing salt for the reason beyond his control and therefore, for that reason the lease cannot be - 6 - terminated. 5. After submission of the reply, nothing was done by the Defendant No.2 during the year 2002 as also during the year 2003. Defendant No.1 on 4-2-2004 issued two show cause notices, one in relation to Jamasp Salt works and the other in relation to Battiwalla Salt works, in which earlier show cause notice dated 21-5-2002 was referred to. It was stated that the Plaintiff in violation of Condition No.1 of the lease deed is not using a part of the land leased to him for manufacturing salt. The reply given by the Plaintiff to the show cause notice dated 21-5-2002 was also referred to and it was stated that the reply was not satisfactory. A further allegation was made that the growth of grass on the land is not spontaneous but the grass is being systematically cultivated by the Plaintiff by diversion of natural flow of nalla water to the lands for grass cultivation. It was stated that the Plaintiff is not using the land for the purpose for which it was leased to him and therefore, as per clause 5 of the lease deed the lessor was authorised to cancel the lease agreement. The Plaintiff, was therefore, called upon to show cause why the lease should not be - 7 - terminated. 6. It appears that the Plaintiff after receiving the show cause notice addressed a letter to the Defendant No.1 requesting him to grant time up to 16-3-2004 for submitting his reply to the show cause notice. But that request was rejected by the Defendant No.1 and by order dated 12-3-2004 the Defendant No.1 terminated the lease of both the salt lands. 7. Feeling aggrieved by the order dated 12-3-2004, the Plaintiff filed an appeal before the Salt Commissioner. That appeal was decided by the Salt Commissioner by his order dated 31-5-2004. The Commissioner observed in his order that the Defendant No.1 should have given an opportunity to the Plaintiff to represent his case as asked by him. It was also observed that in a similar matter in the case of Arthur & Jankins Salt Works, whose leases were also cancelled by the Defendant No.1, the parties had approached this court by filing Writ Petition and in that Writ Petition this Court has held that the Deputy Salt Commissioner should give personal hearing to the Petitioner and therefore, the Commissioner directed the Defendant No.1 to give - 8 - opportunity of personal hearing to the Plaintiff and then pass a reasoned order. 8. While the matter was pending before the Defendant No.1, on 5th July, 2004 the Plaintiff made an application for joint inspection of the lands. On 9th July, 2004 the Defendant No.1 along with the Plaintiff jointly inspected the salt lands. On 20th July, 2004, the Plaintiff communicated his impression of the inspection of the salt lands held on 9th July, 2004. According to the Plaintiff, when arguments were being heard by the Defendant No.1, it was for the first time disclosed to the Plaintiff that the show cause notice dated 4-2-2004 was based on a report of a committee which was constituted by the Defendant No.1. The Plaintiff, therefore, submitted an application on 29th July, 2004 for supply of copy of the report of the committee. Pursuant to that application, a copy of the report of the committee of December, 2003 was supplied to the Plaintiff. After receiving the report the Plaintiff by letter dated 31st August, 2004 placed his objection to that report on the record of the Defendant No.1. Thereafter, the Defendant No.1 passed the order dated 1-4-2005. By that order the Defendant No.1 held that the Plaintiff - 9 - has violated the conditions of lease and therefore, the least of both the salt lands is terminated. The Defendant No.1 also directed the Plaintiff to hand over possession of the salt lands to the Factory Office, Bhandup. 9. In this suit, it is basically the order dated 1-4-2005 which is under challenge. 10. The learned Counsel appearing for the Plaintiff submits that the suit pertains to two parcels of salt lands; one admeasuring approximately 432 acres and the other approximately 350 acres leased under a Government Grant or demise of December 1921, to the Plaintiff’s predecessor. The salt lands have Thane creek on its eastern boundary and a range of small hillocks along the western boundary. The Eastern Express Highway bisects the lands into two parts; the portion to the west admeasures approximately 150 acres approximately, whereas the remaining lands (approximately 630 acres) lie on the eastern side- between the Highway & Thane creek. The lands to the East are used even today for the manufacture of salt: in the year 2004-2005 the salt production was the highest in the past 10 years. However the smaller - 10 - portion of lands to the west have been affected by a nallah which drains sewage water from the adjoining high lands/ slum settlements on to it. If salt water is allowed to enter & mix with this sewage water it results in health hazard: mosquitoes. Moreover the resultant salinity level of the mix is not adequate for salt manufacture. Despite repeated requests by the Plaintiff to the Salt Commissioners Office & the BMC no steps have been taken to prevent/divert the flow of the nullah/sewage water away from the said Western portion of the salt lands. Accordingly ingress of salt water in this portion has been blocked and this portion has not been usable for salt production for some years. The learned Counsel further submits that the show cause notice dated 4-2-2004 raised only one ground i.e. the grass growth is not spontaneous but is a systematic cultivation and the land is particularly being used by the Plaintiff for grass cultivation in violation of the lease conditions. The order dated 1st April, 2005, however, terminates the lease on two separate and distinct grounds, i.e. ground of grass cultivation which is mentioned in the show cause notice and the failure of the Plaintiff to achieve the production norms of 20 MT per acre. A ground - 11 - which was not raised in the show cause notice has been referred to and relied on for the first time in the impugned order. The learned Counsel relies on a judgment of the Supreme Court in the case of The State of Maharashtra v/s. Babulal Kriparam Takkamore and ors, AIR 1967 SC 1353 and submits that if the order is based on two or more grounds and if a ground is found to be bad, irrelevant, and non existent, then the order cannot be sustained if there is nothing to show that the authority would have passed the order on the basis of the other relevant and existing grounds. It is submitted that as the ground that the Plaintiff has failed to achieve the production norms was not mentioned in the show cause notice, termination of the lease for that reason is opposed to the principles of natural justice. According to the learned Counsel, therefore, as there is nothing on record to indicate that the Defendant No.1 would have made the order even on the ground which is mentioned in the show cause notice, the order is invalid. It is further submitted that the order dated 1st April, 2005 is vitiated because it suffers from non-application of mind to the relevant facts on record. The impugned order does not consider the justifications which were given by the - 12 - Plaintiff for not using the part of the slat land on the western side for manufacturing the salt. The learned Counsel submits that in the order dated 1-5-2004, the Defendant No.1 has relied on the Committee’s Inspection Report of December, 2003. But the Defendant No.1 does not consider while relying on that report the objections that were submitted by the Plaintiff to that report. It is submitted that because the report of the Committee of December, 2003 was an exparte report, in asmuch as, representative of the Plaintiff was not present at the time of inspection, the Defendant No.1 agreed to have joint inspection. Accordingly, joint inspection was held on 9th July, 2004. As a result of joint inspection it was the duty of the Defendant No.1 to prepare a joint inspection report, but the Defendant No.1 did not prepare any such report. Therefore, the Plaintiff recorded their observations in his letter dated 20th July, 2004. The Defendant No.1 has referred to the joint inspection on 9th July, 2004, but has not considered the observations of the Plaintiff contained in the letter dated 20th July, 2004. This shows violation of the principles of natural justice by the Defendant No.1. It is further submitted that when the lease was terminated for the - 13 - first time by order dated 12-3-2004, the Defendant No.1 had directed the Plaintiff to hand over possession to Dy.Superintendent of Salt, Bhandup Factory. The Plaintiff did not hand over possession pursuant to the order dated 12-3-2004. He filed an appeal before the Salt Commissioner against that order. The order was set aside by the Commissioner by his order dated 31st May, 2004 and the Defendant No.1 was directed to rehear the matter. After rehearing, the Defendant No.1 has made the order dated 1-4-2005. The Plaintiff did not hand over possession. He filed the present suit and in this suit on 27th April, 2005 this court granted ad-interim order. As a result of which the possession of the Plaintiff is protected. It is submitted that right through the Plaintiff has been in possession. He is manufacturing salt and even according to the order of the Defendant No.1 dated 1-4-2005 the production of salt during the year 2004 at the two salt works has been the highest. The Plaintiff has also paid taxes on the salt that was manufactured during the year 2004 onwards up to date. 11. The principal argument on behalf of the Defendant No.1 and the Defendant No.2 is that after - 14 - the order dated 12-3-2004, on 24-3-2004 the Defendants No.1 & 2 have resumed the land and therefore the Defendants Nos. 1 & 2 are in possession of the land and therefore there is no question of granting interim injunction in favour of the Plaintiff. In support of the submission that because the Defendants Nos. 1 & 2 have taken possession of the land on 24-3-2004 pursuant to the order dated 12-3-2004, they are validly in possession and therefore there is no question of this court granting any temporary injunction for protection of the possession of the Plaintiff, the Defendants Nos. 1 & 2 rely on two judgments of the Supreme Court, one in the case of Hajee S.V.M. Mohamed Jamaludeen Bros. v/s. Government of Tamilnadu, AIR 1997 SC 1368 and other in the case of State of Orissa v/s Rani Chandradev & Ors., 1964 SC, 685. 12. In reply, on behalf of the Plaintiff it is submitted that even assuming that the lands were resumed by the Defendants Nos. 1 & 2 on 24-3-2004 pursuant to the order dated 12-3-2004, then also as that order was set aside by the Appellate authority and fresh order has now been made on 1st April, 2005 and as admittedly after 1-4-2005 the Defendants Nos. - 15 - 1 & 2 have not taken possession, Defendants Nos. 1 & 2 cannot claim to be in possession of the land. So far as the judgment of the Supreme Court in the case of State of Orissa v/s. Rani Chandradev relied on by the Defendants Nos. 1 & 2 is concerned, it is submitted that the judgment has been held to be per-incurrim by the Supreme Court by its judgment in the case of Express Newspapers vs. Union of India, (1986) 1 SCC 133, and therefore, according to the Plaintiff, the Defendants cannot rely on that judgment. So far as reliance placed on the judgment of the Supreme Court in the case of Hajee Mohamed Jamaludeen Bros. case is concerned, it is submitted that in that case the Supreme Court was not considering the termination of a lease. In that case there was a license granted to collect chank shells from coastal sites and the terms on which the licence was granted were drastically different from the terms found in the present lease deed. The Plaintiff relies on a judgment of the Supreme Court in the case of Express Newspapers referred to above as also the judgment of the Supreme Court in the case of State of U.P. v/s. Dharmender Prasad Singh, AIR 1989 SC 997 to contend that the Defendant No.1 in order to get possession of the lands will have to adopt due - 16 - process of law and they cannot unilaterally claim to have entered into possession. It is submitted that in any case the physical possession of the land was always with the Plaintiff and as the Plaintiff has demonstrated that the order dated 1-4-2005 terminating the lease is patently illegal, the Plaintiff is entitled to have his physical possession of the land protected. 13. So far as the ground raised by the Plaintiff that as the second reason given in the termination order was not part of the show cause notice is concerned, it is submitted by the learned Counsel for the Defendants that the second ground was not really a fresh ground, but it was a consequence of first ground. It is further submitted on behalf of the Defendants Nos. 1 & 2 that the order has been made after giving an opportunity of being heard to the Plaintiff and the entire material produced which was relevant has been taken into consideration by the Defendant No.1. It is submitted that the Plaintiff has not been able to show that the Plaintiff is not responsible for not using the land for manufacturing the salt. - 17 - 14. Now, for the purpose of deciding this Notice of Motion, the first question that has to be enquired into is whether it can be said that prima facie the order dated 1-4-2005 is a valid order. It is common ground before me that the Defendant No.1 was obliged to observe principles of natural justice in making that order. Perusal of the lease deed shows that Condition No.1(a) of the lease deed reads as under:- 1(a) The lessees shall use the demised premises for the purpose of manufacturing common & edible salt & its by-products only; Clause (V) of the lease deed pursuant to which the lease has been terminated reads as under:- V. If and whenever there shall be a breach of any of the conditions or covenants by the lessees hereinbefore contained or any of the conditions of the license granted under the Bombay Salt Act, 1890 in respect of the demised premises, the lessor may cancel this lease notwithstanding that the term of ninety nine years has not elapsed and may re-enter upon any part of the demised premises in the - 18 - name of the whole and take possession of the same and of all of the buildings, roads and erections then standing thereon and thenceforth possess the same absolutely and thereupon the said term of ninety nine years shall absolutely cease & determine and the lessees shall not be entitled to any compensation whatever in respect of the said buildings, roads & erections of which possession shall have been taken so as aforesaid. 15. Reading of the above quoted two clauses together shows that it is one of the conditions of the lease that the lessee uses the land for the purpose of manufacturing the salt only and for no other purpose and that the lessor can terminate the lease before expiry of the term of the lease only after the lessee commits breach any of the conditions of the lease. Therefore, for validly terminating the lease a finding that the lessee has committed breach of the condition of lease is necessary. Recording of such a finding results in termination of the lease and obviously, therefore, the Defendant No.1 is obliged to observe the principles of natural justice in - 19 - proceedings where such a finding is to be recorded. Perusal of the order dated 1-4-2005 shows that for recording the finding that a part of the land given on lease to the Plaintiff is being used by the Plaintiff for systematically growing grass, the Defendant No.1 has solely relied on the report of the committee of December, 2003. In the order itself the Defendant No.3 observed that copy of the report of that committee was given to the Plaintiff. In paragraph 27 of the plaint, the Plaintiff has stated that after examining the report of the committee of December, 2003 by his letter dated 31st August, 2004 the Plaintiff recorded his objections to the report of the committee and contended that the report of the committee is erroneous. Paragraph 27 of the plaint has been replied to in paragraph 54 of the affidavit in reply filed by the Defendants Nos. 1 & 2. Perusal of paragraph 54 of the affidavit in reply shows that averments made in paragraph 27 of the plaint that after receiving a copy of the report of the Committee of December, 2003, the Plaintiff placed his objections on record by letter dated 31st August, 2004 is not denied. It is obvious that when the Defendant No.1 made the order dated 1-4-2005, it had on its record the objections raised by the Plaintiff - 20 - to the committee’s report of December, 2003, and therefore, the principles of natural justice required the Defendant No.1 to take the objections raised to the report into consideration before relying on that report for recording the finding against the Plaintiff. Perusal of the order dated 1-4-2005 shows that not only that the objections which were raised by the Plaintiff in the letter dated 31st August, 2004, Exh.Q, have not been taken into consideration by the Defendant No.1 while relying on the report of the committee of December, 2003, but even those objections have not even been referred to in the order. Without considering the objections raised to the report, reliance placed by the Defendant No.1 on the report of the committee of December, 2003 is clearly and patently in breach of the principles of natural justice. Because it shows that the Defendant No.1 has excluded from its consideration the material which was relevant. It also shows that the Defendant No.1 has relied on the report of December, 2003 without considering the point of view of the Plaintiff in relation to that report. Perusal of the order dated 1-4-2005 further shows that the Defendant No.1 has accepted that there was a joint inspection of the salt lands on 9-7-2004. The Plaintiff - 21 - has stated that during the course of hearing before the Defendant No.1, the Plaintiff submitted an application dated 5th July, 2004 before the Defendant No.1. Copy of that application is at Exh.M to the plaint. Perusal of that application shows that when that application was given by the Plaintiff, the Plaintiff was not aware of the