Case: Rajasthan State I.D.I.Corpn. Ltd.  Vs. Diamond &amp; Gem Dev. Corpn. Ltd.

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, and that the order of cancellation was liable to be set aside for lack of jurisdiction and for want of competence.25. The aforesaid reasons given by the High Court are mutually inconsistent. When the High Court came to the conclusion that the appellant-RIICO had no competence to deal with the land and to cancel the allotment made in favour of the respondent-company, there was no justification to hold RIICO responsible for providing the approach road. Such a finding could be permissible only if the appellant-RIICO had competence to deal with the land in dispute.26. The High Court also erred in holding that the provision of providing the access road was an obligation on the part of the appellant-RIICO, deciding this on equitable grounds. The terms of the lease deed clearly stipulated that in case the appellant-RIICO provides the access road, it will be vested with the right to collect the charges incurred by it from the respondent-company, therein, and in the alternative, it would be the obligation of the respondent- company to develop its own infrastructure, and the same would include development of the access road. Therefore, the appellant-RIICO was not under any obligation to provide the said access road. 27. The interpretation given to the amended Rule 11-A of the Rules 1959 by the High Court, takes away the vested right of the appellant- RIICO in the title as well as in the interest that it had acquired in the property, as it had paid the entire amount for the land to the State when possession of land was handed over to it. Rule 11-A of the Rules 1959 was amended only to facilitate the respondent-company to grant further sub-lease and not to divest RIICO from its rights and title. It was found necessary in wake of difficulties faced by the respondent-company as it was not permissible for it to grant further sub-lease. Thus, the rule provided a deeming clause/fiction that for the purpose of sub-lease by the respondent- company to further allottees, it would be deemed that the State Government had executed the lease in favour of the respondent-company. The terms “mutatis mutandis”, and “as if”, used in the amended provisions of Rule 11-A of the Rules 1959 simply facilitated the sub- letting of a part of the premises by the respondent-company, and did not take away the title and rights that the appellant-RIICO had over the land. The Rule 11-A of the Rules 1959 has further been amended on 12.10.2000 enabling all the allottees of RIICO to sub-lease further. Thus, if the interpretation given by the High Court is accepted, the appellant RIICO looses all its lands and properties and rendered the development authority existing on papers only, without any status/authority. 28. The ultra activist view articulated by the High Court on the basis of supposed intention and imaginative purpose to the amendment act, is uncalled for and ought to have been avoided. It rendered the appellant-RIICO totally insignificant and irrelevant without realising that the appellant-RIICO had autonomous functioning, and the interpretation given by the High Court has devastating effect underlying its status, authority and autonomous functioning. In fact, by interpretation the High Court had conferred an authoritarian role to the State, taking away the right of appellant-RIICO on its property without realising that the amendment to Rule 11-A of the Rules 1959 had specifically been engrafted therein only, for the purpose of facilitating the respondent-company to grant further sub-lease. Thus, it is evident that the High Court decided the case on speculative and hypothetical reasons. 29. The terms incorporated in the lease deed itself provide for timely completion of construction and also for the commencement of production within a stipulated period. Records however, reveal that only 10% of total construction work stood completed by the respondent- company. No proper application was ever filed for seeking extension of time by the respondent-company, as per the Rules. We have been taken through the record. While providing justification for the non-completion of construction and commencement of production, in very vague terms, it was submitted by the respondent-company that extension of time was sought from statutory authorities. However, the said application did not specify how much more time the company was seeking, and that too, without meeting any requirements provided in the statutory rules. 30. According to clause 2(d) of the lease deed the entire project was to be completed within a period of five years i.e. by 25.5.1994. But it is evident from the material on record that construction was just made on the fraction of the entire land. Clause 2 (i) contemplated that, the lessee will not transfer nor sub-let nor relinquish rights without prior permission from the appellant-RIICO. However, it is evident from the record that the respondent-company had negotiated with a third party for development of the land. 31. The cancellation of allotment was made by appellant- RIICO in exercise of its power under Rule 24 of the Rules 1979 read with the terms of the lease agreement. Such an order of cancellation could have been challenged by filing a review application before the competent authority under Rule 24 (aa) and, in the alternative, the respondent- company could have preferred an appeal under Rule 24(bb)(ii) before Infrastructure Development Committee of the Board. The respondent- company ought to have resorted to the arbitration clause provided in the lease deed in the event of a dispute, and the District Collector, Jaipur would have then, decided the case. However, the respondent- company did not resort to either of the statutory remedy, rather preferred a writ petition which could not have been entertained by the High Court. 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.

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

Explanation:
1[ds]It is evident from the above, that generally 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. It is designed to promote justice (ex debito justiceiae). The grant or refusal of the writ is at the discretion of the court. The writ cannot be granted unless it is established that there is an existing legal right of the applicant, or an existing duty of the respondent. Thus, the writ does not lie to create or to establish a legal right, but to enforce one that is already established. While dealing with a writ petition, the court must exercise discretion, taking into consideration a wide variety of circumstances, inter-alia, the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant or refusal of the writ, and the nature and extent of injury that is likely to ensue by such grant orHigh Court recorded a finding, as regards the submission made on behalf of the appellant-RIICO, stating that the audit conducted by it showing various irregularities and pointing out the mis-appropriation of public funds by the respondent-company, was a matter entirely unrelated to the allotment and development of the said land. 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 therefore the order passed by the appellant- RIICO, was wholly without jurisdiction, as after 4.11.1991, 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, and that the order of cancellation was liable to be set aside for lack of jurisdiction and for want of competence.25. The aforesaid reasons given by the High Court are mutually inconsistent. When the High Court came to the conclusion that the appellant-RIICO had no competence to deal with the land and to cancel the allotment made in favour of the respondent-company, there was no justification to hold RIICO responsible for providing the approach road. Such a finding could be permissible only if the appellant-RIICO had competence to deal with the land in dispute.26. The High Court also erred in holding that the provision of providing the access road was an obligation on the part of the appellant-RIICO, deciding this on equitable grounds. The terms of the lease deed clearly stipulated that in case the appellant-RIICO provides the access road, it will be vested with the right to collect the charges incurred by it from the respondent-company, therein, and in the alternative, it would be the obligation of the respondent- company to develop its own infrastructure, and the same would include development of the access road. Therefore, the appellant-RIICO was not under any obligation to provide the said accesscancellation of allotment was made by appellant- RIICO in exercise of its power under Rule 24 of the Rules 1979 read with the terms of the lease agreement. Such an order of cancellation could have been challenged by filing a review application before the competent authority under Rule 24 (aa) and, in the alternative, the respondent- company could have preferred an appeal under Rule 24(bb)(ii) before Infrastructure Development Committee of the Board. The respondent- company ought to have resorted to the arbitration clause provided in the lease deed in the event of a dispute, and the District Collector, Jaipur would have then, decided the case. However, the respondent- company did not resort to either of the statutory remedy, rather preferred a writ petition which could not have been entertained by the High Court. 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.Hence, discretion must be exercised by the court on grounds of public policy, public interest and public good. The writ is equitable in nature and thus, its issuance is governed by equitable principles. Refusal of relief must be for reasons which would lead to injustice. The prime consideration for the issuance of the said writ is, whether or not substantial justice will be promoted. Furthermore, while granting such a writ, the court must make every effort to ensure from the averments of the writ petition, whether there exist proper pleadings. In order to maintain the writ of mandamus, the first and foremost requirement is that the petition must not be frivolous, and must be filed in good faith. Additionally, the applicant must make a demand which is clear, plain and unambiguous. It must be made to an officer having the requisite authority to perform the act demanded. Furthermore, the authority against whom mandamus is issued, should have rejected the demand earlier. Therefore, a demand and its subsequent refusal, either by words, or by conduct, are necessary to satisfy the court that the opposite party is determined to ignore the demand of the applicant with respect to the enforcement of his legal right. However, a demand may not be necessary when the same is manifest from the facts of the case, that is, when it is an empty formality, or when it is obvious that the opposite party would not consider the demand.