:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 19 OF 1990 WRIT PETITION NO. 19 OF 1990 WRIT PETITION NO. 19 OF 1990 1. Fali Pirozshah Bomanji ] since deceased, through his ] heirs & legal representatives] 1/1. Mrs. Piloo Fali Bomanjee ] Adult, Occ: Business ] Residing at C/4, Amarchand ] Mansion, 16, Madam Cama Road ] Worli, Mumbai 400 001 ] 1/2. Mrs. Kermeen Bose ] Adult, Occ: Business ] Residing at 33, Pochkhanawala] Road, Worli, Mumbai 400 030 ] 1/3. Mr. Yazad Fali Bomanjee ] 1/4. Mr. Farhad Fali Bomanjee ] Both Adults, Occ: Business ] Residing at C/4,. Amarchand ] Mansion, 16, Madam Cama Road ] Worli, Mumbai 400 001 ] 2. Miss. Pervin R. Tata ] of Bombay, Indian Inhabitant,] residing at Palm Springs, ] Cuffe Parade, Bombay 400 005 ]..Petitioners versus 1. Union of India, ] 2. The Salt Commissioner, ] having its office at Shivaji ] Nagar, Rambaug Road, Jaipur ] State of Rajasthan ] 3. Dy. Salt Commissioner, ] having his office at Exchange] Building, Ballard Estate, ] Bombay 400 038 ] 4. Superintendent of Salt, ] having his office at Bhandup ] (East), Bombay 400 078 ] :2: 5. Municipal Corporation Gr. ] Mumbai, Mahanagarpalika Marg ] Head Office, Opp. CST ] Bombay 400 001 ]..Respondents Mr. E. P. Bharucha, Sr. Counsel with Mr. S. K. Cooper i/b. M/s. Purnanand & Co. for the Petitioners. Mr. R. Raghuvanshi, Additional Solicitor General with Mr. S. R. Rajguru and Mr. Afroz Shah for Union of India. Mr. N. A. Shaikh with Ms. Modle for MCGM - Respondent No.5. Mr. Parag Kabadi with Mr. Vatsal Shah i/b. Doijode Associates for the Intervenors - Ajmera Housing Construction. CORAM : BILAL NAZKI and CORAM : BILAL NAZKI and CORAM : BILAL NAZKI and S. A. BOBDE, JJ. S. A. BOBDE, JJ. S. A. BOBDE, JJ. Date of Reserving : 25.01.2008 Date of Reserving : 25.01.2008 Date of Reserving : 25.01.2008 the Judgment the Judgment the Judgment Date of Pronouncing : 14.03.2008 Date of Pronouncing : 14.03.2008 Date of Pronouncing : 14.03.2008 the Judgment the Judgment the Judgment ORAL JUDGMENT (Per: S. A. BOBDE, J.) : ORAL JUDGMENT (Per: S. A. BOBDE, J.) : ORAL JUDGMENT (Per: S. A. BOBDE, J.) : 1. The petitioners have challenged the Order dated 1.12.1989 passed by the Respondent No.2 Salt Commissioner terminating the lease of land and directing resumption of the land to the Government of India in respect of Shepherd and Shepherd Annexe Salt Works. 2. The lease was in respect of land for :3: carrying out the manufacture of salt known as Salt Pan Land. The duration of the lease was for a period of 99 years commencing from 15th October, 1917. The petitioners were allowed to carry on manufacture of salt on the land in pursuance of a licence granted by the Salt Commissioner under the Central Excise and Salt Act, 1944. The area in question is 450 Acres and 1 Guntha together with the salt pans and building standing thereon. 3. Under the Lease, vide clause 1(a) the lessees could use the demised premises for the purpose of manufacturing common and edible salt and its by-products only. The manufacture had to be in accordance with the terms of a licence to be granted for the said purpose. In addition to the duties and taxes otherwise leviable, the lessees were bound to pay royalty on the salt manufactured from the salt pans at a certain rate for per maund of salt. The lessees were also liable to pay water taxes to the Bombay Municipal Corporation. The lease was liable to be cancelled upon breach of not only any of the conditions of the lease but also of any of the conditions of the licence. 4. The ground rent was imposed by clause 16 of :4: the licence payable at such rate as may be fixed under the orders of the Government. 5. Apparently, sometime in 1984 the lessees fell in arrears of payment of ground rent including assignment fees and they failed to manufacture salt from 1983 onwards. Accordingly, the Salt Commissioner issued a Show Cause Notice to the lessees, which resulted in cancellation of a lease. That order however was set aside by this court on 12th June, 1989 in Writ Petition No. 1456 of 1989 and the matter was remanded back for a fresh decision in accordance with the law. 6. After remand, the lessees were heard on 19.7.1989 on the three issues, on which the Show Cause Notice had been passed and replied to: (i) Non manufacture of salt from 1983 onwards. (ii) Non payment of the dues to the Government such as ground rent and assignment fees. (iii) Entering into an Agreement with M/s. Ajmera Housing Corporation for constructing tenements in the leased area of the Salt Department for salt manufacture. :5: 7. Eventually, the Salt Commissioner cancelled the lease on grounds (i) and (ii) above. That decision is challenged before us. 8. The learned counsel for the petitioners contended that the cancellation is illegal and arbitrary. As regards the first ground it was contended that the alleged non manufacture of salt from 1983 was due to the laying of sewerage lines by the Bombay Municipal Corporation on the lands in question. As regards the other ground of non payment of dues, the petitioners contended that they had incurred no liability to pay the ground rent which was payable only upon manufacture of salt and further they were not liable to pay any assignment fees, for which they were said to be in arrears. 9. There is no merit in either of the contentions. There is no dispute that the licence imposes a penalty for failure to manufacture salt for two consecutive seasons without valid reasons and that the violation of condition of the licence renders the licence liable to be cancelled. Now according to the petitioners, they were prevented from manufacturing salt because the Bombay Municipal :6: Corporation undertook sewerage work. In view of the dispute raised by the petitioners, the Salt Commissioner ordered joint inspection of site on 1.9.1989 which do not bear out the petitioners contentions. In fact, the Salt Commissioner has noted that Bombay Municipal Corporation had carried out the work in the Salt Works sometime between 1984 and 1986 whereas the lessees stopped manufacture of salt in 1983 itself. The Salt Commissioner therefore rejected this contention of the petitioners. There is no material on record to hold that the findings of the Salt Commissioner was vitiated on any count. 10. As regards the ground pertaining to non payment of Government dues, the learned counsel for the petitioners submitted that the petitioners were not liable to pay alleged ground rent. According to them they have paid the ground rent upto 30.6.1984 and they are not liable to pay assignment fees, at all. According to them the ground rent is payable only if salt is manufactured and since they were prevented from manufacturing salt they were also not liable to pay ground rent. This contention appears to be based on confusion of ground rent with royalty, which are distinct liabilities. The lease :7: clearly stipulates that the lessee shall manufacture salt in accordance with the terms of licence. The licence vide Clause 16 imposes liability to pay the ground rent at such rate as may from time to time be fixed under the orders of the Government. In contrast, the liability to pay royalty is on the salt removed from the salt pan which is imposed under clause 1(e) of the lease itself and is made payable per Indian maund. There is therefore no merit in the contentions on behalf of the petitioners. Moreover, at no point of time have the petitioners questioned their liability to pay the ground rent. There is also no merit in the contention that the petitioners were not liable to pay assignment fee. The learned Additional Solicitor General submitted that the rates of lease mentioned were revised by the Government with effect from 1.7.1983 and under the new rates Rs.1/- per tonne was payable as assignment fee and Rs.2/- per acre per annum as ground rent. They have further stated that the assignment fee is leviable subject to a minimum production of 20 tones per acre per annum. It is true that the assignment fee is not fixed by the lease, but is fixed by the Government under the power to fix the ground rent. At no point of time have the petitioners challenged the :8: imposition of ground rent as assignment fees. There is therefore no merit in this contention either. 11. It may be noted that the Salt Commissioner has not cancelled the petitioners lease on the ground that the petitioners had entered into an Agreement with M/s. Ajmera Housing Corporation for constructing tenements in the leased premises. It is therefore not necessary to consider the ground in that regard. In this view of the matter, we find that the impugned order does not suffer from any arbitrariness or illegality and the petition is therefore dismissed. 12. At this stage, Mr. Cooper, the learned counsel for the petitioners, seeks stay of this Judgment to enable the petitioners to approach the Supreme Court. However, we do not think that it is an appropriate case in which we should grant stay. The oral application for stay is rejected. sd/- (BILAL NAZKI, J.) (BILAL NAZKI, J.) (BILAL NAZKI, J.) sd/- (S. A. BOBDE, J.) (S. A. BOBDE, J.) (S. A. BOBDE, J.)