Rajasthan State I.D.I.Corpn. Ltd. & Anr vs Diamond & Gem Dev. Corpn. Ltd. & Anr

G. The respondent-company filed another Writ Petition No. 105 of 1997, challenging the cancellation order dated 1.10.1996 and the taking over of possession by the appellant on 3.10.1996. The appellant contested the said writ petition on the grounds that it was entitled to restoration of possession, as the respondent-company had failed to ensure compliance with the terms and conditions incorporated in the lease deed, according to which, the company was required to complete the said project within a period of 5 years. However, presently, the extent of development completed by it stood at 10%. Therefore, in light of the aforementioned circumstances, the appellant had no choice but to cancel the lease deed and take back possession.

H. The High Court vide its impugned judgment and order, allowed both the writ petitions quashing the order of cancellation, and directed the restoration of possession of the aforesaid land to the respondent-company, and further, also directed the appellant to provide to the respondent-company, the approach/access road demanded by it.

The High Court has mis-interpreted the amendment to Rule 11-A of the Rules 1959, and has thus held that the appellant had no jurisdiction to cancel the said lease, as the respondent-company by virtue of the operation of the amended provision, had become a direct lessee of the State. In such a fact-situation, there was no obligation on the part of the appellant to provide the approach road as it was not the lessor of the respondent-company. In case by virtue of the amendment in Rule 11-A of the Rules 1959, the State Government became the lessor, the appellant-RIICO lost the title/interest over the property which had been acquired by it on making payment of the huge money and that too, without getting any refund. Such an interpretation leads to absurdity. Thus, the appeals deserve to be allowed.

The terms and conditions incorporated in the lease deed reveal that, the allotment was made on “as-is- where-is” basis. The same was accepted by the respondent-company without any protest, whatsoever. The lease deed further enabled the appellant to collect charges, in case it decided to provide the approach road. Otherwise, it would be the responsibility of the respondent-company to use its own means to develop such road, and there was absolutely no obligation placed upon the appellant to provide to the respondent the access road. As the respondent-company was responsible for the creation of its own infrastructure, it has no legal right to maintain the writ petition, and courts cannot grant relief on the basis of an implied obligation. The order of the High Court is in contravention of clause 2(g) of the lease deed.

3(a) Notwithstanding anything hereinbefore contained if there shall have been in opinion of the lessor any breach by the lessor…. or if the lessee fails to commence and complete the buildings in time and manner it shall be lawful for the lessor ….to reenter without taking recourse to the Court of law up on the demised premises or any part there of his name of whole and there on this demise shall absolutely cease and determine and the money paid by the Lessee by virtue of these preset shall stand forfeited to the lessor without prejudice to rights of the lessor here under with interest thereon at @19% per annum and the Lessee shall not be entitled to any compensation whatsoever.

III. Contractual disputes and writ jurisdiction

15. 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.

IV. Interpretation of terms of contract

(Emphasis added)

32. In view of the above, the appeals deserve to be allowed. Thus, the appeals are allowed. Judgment and order impugned are set aside and the order of cancellation of allotment in favour of the respondent- company by the appellant is restored. However, in the facts and circumstances of the case, there shall be no order as to costs.