Case: Saroj Screens Pvt.Ltd Vs. Ghahshyam

for different reasons, that Resolution dated 28.8.1991 and the sanction accorded by the State Government vide letter dated 12.6.2000 are legally unsustainable does not call for interference by this Court. 17. We are also convinced that even though the lease granted to Gopaldas Mohta was renewed in favour of Parmanand Mundhada vide Resolution dated 29.10.1975, respondent Nos.1 and 2 cannot derive any benefit from the said renewal merely because the Corporation did not cancel or rescind the resolution. It was neither the pleaded case of respondent Nos.1 and 2 nor any material was produced by them before the High Court to show that Parmanand Mundhada had taken any action in furtherance of Resolution dated 29.10.1975 and fresh lease deed was executed in his favour. The only plea taken by them was that Parmanand Mundhada had filed an appeal 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 residential accommodation by acquiring agricultural land and making it available for residential purposes. The lease granted in respect of building sites of 10,000 sq. ft. contained a renewal clause with a stipulation that the lessor can make fair and equitable increase in the amount of annual rent. At the time of renewal, the lessor increased the annual rent from Rs. 3-8-0 to Rs. 21-14-0 in accordance with Clause III of the indenture of lease. One of the preliminary issues framed by the Subordinate Judge, Nagpur was whether the Civil Court has the jurisdiction to decide as to what should be fair and equitable enhancement in the amount of annual rent. He ruled in favour of the plaintiff and his view was confirmed by the lower appellate Court. When the matter was taken up before the High Court, the Division Bench consisting of the Chief Justice and Mudholkar, J expressed divergent views. The third Judge to whom the matter was referred agreed with the learned Chief Justice that the Civil Court did not have jurisdiction in the matter. By majority of 2:1, this Court reversed the judgment of the High Court. Speaking for the majority, S. R. Das, J made the following observations: "We consider that the words" fair and equitable must be given their due meaning and proper effect. The question then asked is – what meaning is to be given to the words "such ... as the lessor shall determine". It is indeed true that these words constitute an adjectival clause to the expression "fair and equitable enhancement", but we consider that the meaning of the adjectival clause is merely this: the lessor must first determine what it considers to be fair and equitable enhancement; but if in fact it is not so, it is open to the lessee to ask the court to determine what is fair and equitable enhancement. We do not think that on a proper construction of the clause, the intention was to oust the jurisdiction of the court and make the determination of the enhancement by the lessor final and binding on the lessee." 19. In the present case, we are not concerned with the question whether the decision of the Corporation to increase the rent was legally correct and justified because, as mentioned above, the appeal allegedly filed by Parmanand Mundhada under Section 397 (3) read with Section 411 of the Act was not pursued to its logical end and in the writ petitions filed 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 Corporation was duty bound to take action and decision strictly in consonance with the constitutional principles and decision to renew the lease in favour of Parmanand Mundhada could not have been taken except after following a procedure consistent with the equality clause, which was not done.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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 Corporation was duty bound to take action and decision strictly in consonance with the constitutional principles and decision to renew the lease in favour of Parmanand Mundhada could not have been taken except after following a procedure consistent with the equality clause, which was notIn the present case, we are not concerned with the question whether the decision of the Corporation to increase the rent was legally correct and justified because, as mentioned above, the appeal allegedly filed by Parmanand Mundhada under Section 397 (3) read with Section 411 of the Act was not pursued to its logical end and in the writ petitions filed by them, respondent Nos.1 and 2 did not question ten times increase in the rent payable by the lessee.We are also convinced that even though the lease granted to Gopaldas Mohta was renewed in favour of Parmanand Mundhada vide Resolution dated 29.10.1975, respondent Nos.1 and 2 cannot derive any benefit from the said renewal merely because the Corporation did not cancel or rescind the resolution. It was neither the pleaded case of respondent Nos.1 and 2 nor any material was produced by them before the High Court to show that Parmanand Mundhada had taken any action in furtherance of Resolution dated 29.10.1975 and fresh lease deed was executed in his favour. The only plea taken by them was that Parmanand Mundhada had filed an appeal 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.The factual matrix of this case shows that before granting 30 years lease of the plot in favour of the appellant, the Corporation neither issued any advertisement nor followed any procedure consistent with the doctrine of equality so as to enable the members of the public to participate in the process of alienation of public property. Therefore, the conclusion reached by the High Court, though for different reasons, that Resolution dated 28.8.1991 and the sanction accorded by the State Government vide letter dated 12.6.2000 are legally unsustainable does not call for interference by this Court.