Jal Mahal Resorts P.Ltd vs K.P.Sharma & Ors

4. In so far as the appeals preferred by the appellant-M/s. Jal Mahal Resorts Private Limited is concerned, we have noticed that the appeal has been preferred against the common judgment and order of the High Court under challenge herein whereby the writ petitions which were filed by the respondents as public interest litigation bearing DB (CWP) No.6039/2011 entitled Prof. K.P. Sharma vs. State of Rajasthan and Ors as also DB (CWP) PIL No. 5039/2010 entitled Dharohar Bachao Samiti Rajasthan vs. State of Rajasthan and Ors. as also the 3rd writ petition bearing DB (CWP) PIL No. 4860/2010 entitled Heritage Preservation Society Rajasthan and Anr. vs. State of Rajasthan and Ors. have been allowed by the Division Bench of the High Court and resultantly the Mansagar Lake Precincts Lease Agreement dated 22.11.2005 awarding 100 acres of land on lease for a period of 99 years to the respondent No.7/the appellant herein/ M/s. Jal Mahal Resorts Private Limited was declared illegal and void. As a consequence of the same, the appellant Jal Mahal Resorts Private Limited has been directed to bear costs to be incurred in restoration of the original position of 100 acres of land in removing the soil filled in by it and to restore back the possession of land to the Rajasthan Tourism Development Corporation (‘RTDC’ for short) which in turn will hand over the land to Jaipur Development Authority (‘JDA’ for short), Jaipur Municipal Corporation ( ‘JMC’ for short) and the State of Rajasthan. The appellant has further been directed to immediately remove all sedimentation and settling tanks from the Mansagar Lake Basin and to realize costs from M/s. Jal Mahal Resorts Private Limited and to examine restoring position of Nagtalai and Brahampuri Nala (drains) to their original position as redesigned by RUIDP under Mansagar Lake Restoration Plan in consultation with the Ministry of Environment and Forests (‘MoEF’ for short) of the Central Government. The respondent authorities of the State of Rajasthan have been further directed to monitor, maintain and refix boundaries of the Mansagar Lake in its full original length, breadth and depth in consultation with the MoEF of Central Government and not to reduce normal water level. All encroachments made in the attachment area of the Mansagar Lake have been ordered to be removed immediately and the control erected by appellant M/s. Jal Mahal Resorts Private Limited into the lake is ordered to be dismantled and costs have been ordered to be realized from the appellant M/s. Jal Mahal Resorts Private Limited. All the three writ petitions were thus disposed of by the High Court.

5. Before we deal with the respective case and counter case of the contesting parties, it may be relevant and appropriate to state the background of the matter giving rise to these appeals. The writ petitions which have been dealt with by the High Court had been filed in public interest to quash Jal Mahal Tourism Project and cancel Mansagar Lake Precincts Lease Agreement dated 22.11.2005 giving 100 acres of land on lease for a period of 99 years to the respondent No.7. (appellant herein M/s. Jal Mahal Resorts Private Limited and Jal Mahal Lease and License Agreement dated 22.11.2005). In Writ Petition No. 6039/2011 which was filed by Prof. K.P. Sharma prayer had been made to quash approvals and clearances contained in the orders dated 16.9.2009 and 22.9.2009 and to direct the respondent No.7/appellant herein M/s. Jal Mahal Resorts Private Limited to restore the original position of 100 acres of land by removing the soil filled in by it at its own costs.

7. The deteriorating condition of the Lake and the Monument compelled the Government to find ways and means to restore the two components to their original glory. Over a period of 30 years attempts were made by various government agencies and departments to restore the ecological and environment condition of the lake and its adjoining area. However, none of these attempts yielded very positive results because of paucity of resources to take up and sustain the restoration.

8. The Government of Rajasthan, therefore, decided to adopt an incentivized approach to restore the Lake and the Monument and develop the precinct area on a public private partnership format. To improve the condition of the lake, the State of Rajasthan, in consultation with experts and after detailed surveys and analysis, developed a holistic approach involving three components namely (i) restoration of Mansagar Lake, (ii) restoration of Jal Mahal and (iii) development of tourism/recreational components at the lake precincts. Thus, the third component visualized development of the precincts area of the lake which comprised of about 100 acres of land towards the south on a sustainable development model. It was, therefore, required that the lake and Jal Mahal be restored and the lake precinct be developed for limited eco friendly tourism facilities which would also provide funds for O & M of the lake on a continuous basis. The benefits of this project was that it would result in the restoration of the Mansagar Lake and the Jal Mahal monument and there would be consequent development of eco friendly tourism destinations with large open green spaces in the vicinity of the lake which would improve the environment and resultantly, the aesthetics and visual quality of the area.

10. As a consequence of the aforesaid conceptualization, process for bidding started which has been described as First Bid Process by the appellant which started after publication of the advertisement. Request for Qualification (“RFQ”) was released in December, 2000. 6 firms responded and made submissions for qualification. In the meantime, Request for Proposal (“RFP”) document was prepared by the Project Development Corporation Limited (PDCOR) which is a joint venture company of Government of Rajasthan and IL&FS and approvals were given by the Government of Rajasthan. Request for proposal was released and Board of Infrastructure Development & Investment (BIDI), a high powered committee of the Government headed by the Chief Minister with an objective to accelerate private investment in industry and related infrastructure, formed a sub-committee to decide on fiscal concessions necessary for the project. The Jaipur Municipal Corporation was made the nodal agency for project purposes. However, the first bid process failed as despite applying for qualification no bidder ultimately participated in the bid.

11. The aforesaid failure led to the appraisal and approval of the project report by the Ministry of Environment and Forests. The Government of Rajasthan, through Department of Urban Development, sent proposals to Ministry of Environment and Forest (MoEF), Government of India, on 17.08.2001 seeking funds for Lake Restoration of the said project under National Lake Conservation Programme (‘NLCP”). MoEF responded by requesting that details regarding fund requirement, O&M agency, source of funding for O&M along with Detailed Project Report (DPR) comprising of bankable proposal be submitted. Hence, On 8th & 9th December, 2001 and thereafter on 26th & 27th January, 2002, the Project Site was studied by the representatives of MoEF.

12. On 22.1.2002, a letter was written by MoEF wanting break up of estimated costs as also commitment of State Government to bear 30% of the cost sharing as well as identifying agency for carrying out O&M. The State Government was also to ensure that no untreated sewage should be discharged into Mansagar Lake which could be achieved inter alia by diverting the two nallahs that discharged waste in the lake.

13. Based on experts recommendation after complete technical surveys and environmental studies of the lake, the area for the project was identified and recommended by renowned consultants LASA (Lea Associates South Asia Private Limited) as being ecologically viable. The DPR itself mentioned that the ecological restoration of the lake would be carried out on the basis of which it can be sustainable and bankable as required by MOEF through a Public Private Partnership model.

14. On the basis of commitment of State Government to meet 30% expenditure on restoration of Mansagar Lake, MoEF, Government of India, approved the DPR in October, 2001 under the NLCP with 70% amount as grant in aid. MoEF also conveyed its appreciation on DPR and observed as follows:

16. In pursuance to the aforesaid steps, detailed RFP were issued to interested private parties which was approved by JDA and released in July, 2003. The advertisement inviting RFP for selection of Private Sector Developers (“PSD”) was published in leading newspapers (Rajasthan Patrika and Economic Times). In addition, PDCOR developed strategy for marketing and wide publicity of the project by apprising potential entrepreneurs across the globe about the features of the project with a view to encourage them to come forward to participate in the bid process. As the tourism project was to generate funds for sustained O&M measures, the Department of Tourism (“DOT”) and later Rajasthan Tourism Development Corporation (“RTDC”) was made the nodal agency for the project. Four competitive bids including from the Petitioner were received which were evaluated and PDCOR submitted its report to Government of Rajasthan for its approval. The Technical Evaluation Committee constituted for evaluation of bids comprised of eminent experts like Padamashree Dr. B.V. Doshi, Architect, Mr. Mohd. Shaheer, Landscape Architect and Mr. Hemant Murdia, Chief Town Planner, Government of Rajasthan.

17. The petitioner/appellant got the highest marks in technical evaluation of its bid and when financial bids were opened the Petitioner’s bid was found to be the highest. Consequently, ECID in its meeting held on 9.2.2004 headed under the Chairmanship of Chief Secretary decided to grant the project to the Petitioner. The letter of intent was issued to the Petitioner on 30.9.2004. On 22.11.2005 after approval from the Government of Rajasthan the Lease in respect of the project land and the License for restoration and reuse of Jal Mahal were executed.

21. As a measure of restoration and development of the project, the entire project implementation had to be done so as to achieve sustainable eco preservation and development. The Petitioner, therefore, acted under the advise and on the recommendation of experts. These activities were further monitored by the Government of Rajasthan and its agencies. The petitioner/appellant stated that for the purpose of restoration, the Petitioner engaged a number of nationally and internationally renowned consultants including Mr. Soli J. Arceivala, Ex. Director of NEERI, Dr. Shyam R. Asolekar from IIT Mumbai, Dr. G.C. Mishra from IIT Roorkee, Mr. Jal R. Kapadia Environment Consultant, Mumbai and Mr. Herald Craft, renowned lake expert from Germany. Some of these experts had also worked for restoration of the Hussain Sagar Lake in Hyderabad. The State Government had also constituted an Empowered Committee to oversee the time bound restoration of Lake. The work involved realignment of the Nagtalai and Brahmpuri drains so that domestic sewage and waste including run-off and detritus during the monsoons no longer emptied into the cleansed waters as also desilting of the water body which were essential components of DPR as approved by MoEF under NLCP. In order to ensure that the ongoing discharge of drainage did not once again pollute the water, Mr. Herald Craft the German Lake Conservation expert prepared a report which suggested preparing temporary sedimentation/settling tanks near the mouth / discharge point of the re-aligned drains. The purpose of constructing of sedimentation tank was to trap the silt and organic content of the storm water so that the quality of water in the whole of water body is not adversely affected. The sedimentation process were also reviewed by a team of experts from MoEF which found the system as a viable and proper solution. It has been further brought to the notice of this Court that the project fell within item 8(a) of Environmental notification dated 14.09.2006 and was also confirmed by MoEF in its Affidavit in Reply filed to the writ petition and a detailed Environmental Impact Assessment (“EIA”) was carried out by State Level Environment Impact Assessment Authority (“SEIAA”) constituted by MoEF. It is, therefore, stated that all requisite environmental approvals were obtained.

22. The project thereafter was started and the land leased to the Petitioner, according to the appellant, was not a part of the water body in the first Master Plan 1971-1991 for Jaipur and an area of 200 acres around the south side of Jal Mahal was demarcated and reserved for tourist facilities. The land leased to the Petitioner was a part of this land area reserved for tourist facilities. The said land continued to be retained for tourism and recreational activities in the subsequent city master plans including the master plan of 2011 and 2025.

23. The appellant has further stated that the Man Sagar Lake on its western side is bound by Jaipur-Amer road. The level of the road is at a contour level of 100 MRL. The ground floor of the Jal Mahal monument within the lake is at the contour level of 98.2 MRL. PDCOR, based on intensive studies, found this level as the most appropriate level taking into account the fact that the lake was not freshened by natural acquifers but was dependent on surface runoff during the monsoons, and to ensure that ground floor of Jal Mahal was not submerged.

25. It was further averred by the PIL petitioner in the High Court/contesting respondent herein that the Ministry of Environment and Forests (for short ‘MoEF’ ), Government of India prepared National Lake Conservation Plan (for short ‘NLCP’) for restoration, conservation and maintenance of urban lakes. The Government of Rajasthan submitted project for restoration of Man Sagar Lake to the Central Government. The total cost of the project was estimated to be Rs.24.72 crores, out of which 70% was to be provided by the Government of India while rest was to be borne by the State Government. The administrative approval and expenditure was granted by the MoEF vide order dated 5.9.2002 and the order was revised by the MoEF vide dated 23.12.2002. The JDA implemented the lake restoration plan under which Sewage Treatment Plant (STP) near Brahmapuri has been revamped from which treated water is being diverted to lake for compensating evaporation losses during dry weather. A two step Tertiary Treatment Plant has also been developed and lake has been cleared from hyacinth plants completely by the JDA. The JDA has also invested in development of lake front promenade on Jaipur –Amer Road and constructed road along the lake on northern side which has formed a new water body of about 5 hectares in size for storing hill run off during rainy season for wild life which includes Hanuman langur (Semnopithecus entellus), Black aped Hare (Lepus nigricollos), Indian Porcupines (Hystrix Indica), Blue bull (Boselalphus tragocamelus), Sambhara (Cervus unicolor), Common Mangoose (Herpestes edwardsii), Jackals (Canis aureus), Striped Hyaena (Hyaena hyciena) and panther (Panthera leo). The JDA has also funded Rs. 10 million to the State Forest Department for improving lake catchments area falling in the Nagargarh hill area (Arawali Range) which is the only natural watershed. The lake is surrounded almost from three sides by Arawali Hill Ranges. The hills are either part of Nahargarh Wildlife Sanctuary or Reserved Forest Ranges known as Amer Block 54 and Amargarh Block 92. The petitioner/respondent herein and his team was working in executing a JDA sponsored project on bank stabilization of the lake since May, 2005. 35 species of tree and 28 varieties of shrubs were planted. Besides improving landscape, the plant species provide shelter and food to the local fauna and migratory birds may also be benefited. Similar plantation was also done on three islands.

26. The PIL petitioner/respondent herein had further averred that Jal Mahal Tourism Infrastructure Project was conceived and approval was given by the Standing Committee on Infrastructure Development (for short ‘SCID’) in its 3rd meeting held on 21.12.1999. Resolution has also been filed in which it was stated that Jaipur Municipal Corporation must own the project. The bids were invited in the year 2001-01 without identification of the land to be used and without studies with regard to environment impact assessment. The bid process was scrapped and JDA was made sponsoring department for the lake side development component in the meeting of Board of Infrastructure Development and Investment Promotion (for short ‘the BIDI’) held on 23.8.2002 and 3.9.2002.

29. However, the petitioner/contesting respondent himself has added and clarified that later on decision was taken to include KGK Enterprises which according to the petitioner /contesting respondent lack eligibility condition and Jal Mahal Resorts Private Ltd. Company has been incorporated on 10.11.2004. The decision was also taken to give exemption of stamp duty etc.

38. In so far as the reply of the lessee/respondent No.7 and 8/appellants herein/Jal Mahal Resorts Pvt. Ltd. and KGK Consortium is concerned, it had submitted in their reply to the writ petition before the High Court that the State Government promoted the concept of private public partnership to save the burden on the exchequer and the decision had been taken by the expert body at the highest level which is not amenable to interference by this Court. MoEF granted approval of 5.9.2002, on 23.12.2002 administrative approval and expenditure sanction was issued by the Government of India for conservation and management of Mansagar Lake. The bid submitted by M/s. KGK Enterprises in 2003 was found to be the highest and hence the then Chief Minister had approved the decision of giving project to the highest bidder KGK Enterprises on 27.2.2004 and thereafter letter of intent was issued on 30.9.2004 after which lease agreement was executed on 22.11.2005 on which the appellant has already spent amount of Rs.70 crores while executing part I of the project.

While restoration of Mansagar Lake was approved as per the averment of the MoEF confined to the development of lake area, restoration of Jal Mahal which lie within the precinct of the lake, development of lake and the adjoining area to the lake fell within the domain of the Government of Rajasthan which related to development of tourism/recreational components at the lake precincts.

43. The appellant lessee/Jal Mahal Resorts Pvt. Ltd. felt seriously aggrieved and affected by the impugned judgment and order of the High Court and therefore preferred this appeal along with the other connected appeals which are being heard and decided analogously.

93. PDCOR as a part of its evaluation report and other correspondence recommended that apart from the other two bidders who had satisfied the pre-qualification evaluation criteria, even KGK Consortium should be permitted for being considered and the technical evaluation phase as KGK Consortium satisfied the substantive conditions at the pre-qualification evaluation stage. PDCOR in its recommendation further opined that condition of KGK enterprises at the subsequent stage would promote competition amongst the bidders and, therefore, be in public interest. The intent of the RFP according to the PDCOR was never to exclude any bona fide legal entity that may consider putting its bid subject to it satisfying the other threshold criteria as already stated hereinbefore.

111. However, we are of the view that in order to avoid this controversy in regard to these two chunks of lands as to whether the same form parts of the lakebed or not, it would be just and appropriate to slash this part of the land from the lease hold area as per clause 18.4 of the lease deed itself implying that these two areas shall not form part of the lease hold area so as to be given out on lease to the petitioner/appellant. In view of this 13 bigas and 17 biswas of land equivalent to 8.65 acres which has been classified as ‘gairmumkin talab’/ bearing khasra no. 67/317 shall not be treated as a part of the lease hold area and the same shall be within the control and domain of the Government of Rajasthan which will be free to reconvert this area into the lake area.

112. In so far as 14.15 acres of land recorded as barren land/banjar is concerned, we are pleased to hold that this area shall be treated as a construction free zone and neither party i.e. the State of Rajasthan nor the lessee/appellant herein shall be permitted to raise any construction thereon. We are informed that this area is being used as a public promenade (walk way) for the use of the public which shall be allowed to continue.

120. Bearing the aforesaid aspects in mind, we are prone to infer that the disputed area of the lease deed borne out from the revenue record is clearly confined to14.15 acres plus 8.65 acres and the balance area of the lease deed could not have been interfered with so as to set aside the entire project.

122. We, therefore, set aside the period of lease which has been granted in favour of the appellant for a period of 99 years and the same shall stand reduced to a period of 30 years only which could be the maximum period of the lease for the land under the rules which should start ordinarily from the date of its execution so as to expire on or before the period of 30 years. But we are conscious of the fact that much time has lapsed after execution of the lease deed in 2005 due to which only Phase-I of the project could start after which it got stuck and the project is in a state of limbo due to delay on account of the litigation started at the behest of the respondent/PIL petitioners who questioned the validity of the lease deed executed and finally succeeded in getting it set aside. We are, therefore, of the view that the lease deed which could not be made effective in view of the intervening litigation due to which the Project got delayed, it is legally just and appropriate to direct that the period of 30 years of the lease shall now be counted from the date of this judgment and order.

123. We are further of the view that on or after expiry of 30 years to be counted from the date of this judgment and order, if for any reason whatsoever the lease deed is not renewed in favour of the lessee/appellant or the appellant chooses not to seek its renewal, the appellant shall be adequately compensated for the property and structure which stands developed at the instance of the appellant during the period when the lease subsisted in its favour. Subsequently, however, as to what would be the adequate period of lease to be granted in favour of the existing or a new lessee obviously would be determined by the State Government at the relevant time but in so far as the instant lease deed is concerned, the existing period of 99 years shall stand decreased to 30 years to be counted from the date of judgment and order of this Court.

124. Thus the lease deed although was executed for a period of 99 years shall pursuant to this decision, run for a period of 30 years which shall commence from the date of this judgment and order and may be extended by the State Government for such other period as may be considered legally viable based on the rules and regulations at the relevant period. We further add in the interest of justice, that after expiry of 30 years of lease period and in case the lease deed is not renewed in favour of the appellant, the State Government shall compensate the appellants at the market value of the project including compensation for the loss of business and profit. It is clarified that in the event of any dispute arising with respect to quantum of compensation, it may be resolved by availing the remedy of arbitration mechanism provided in the lease deed.

125. We are informed that the first phase of the Project has been completed since February, 2011. It is therefore directed that the completion certificate and the lease agreement for the first phase be issued expeditiously but not later than a period of 30 days from the date of receipt of this order. Accordingly, the State Government shall issue the restoration completion certificate for Phase I to enable the Project alongwith the Jal Mahal Monument as per the Lease Deed, to open for entry and visit of the members of the public. Upon issuance of the phase–I certificate, the project developer/lessee/appellant shall be allowed to undertake the construction as per the approved plan in terms of the lease deed.

126. We further hold that the area of 8.65 acres equivalent to 13 bighas and 17 biswas shall not form part of the lease hold area as already stated hereinabove and the same shall stand re-transferred to the Government of Rajasthan which shall be recarved and added to the lake area and the same shall be maintained by the competent authorities of the State. However, the area of 14.15 acres equivalent to 22 bighas and 17 biswas although shall be notionally treated as part of the lease deed, the said area shall be treated as a construction free zone which will be allowed to be used as a walkway/ the public promenade free of any charge at the instance of the lessor and the lessee. Remaining portion of the land forming part of the lease deed shall remain intact to be used by the appellant as per the terms and conditions of the lease deed already executed. However by way of abundant caution, we clarify that Mansagar Lake Restoration Project if undertaken by the State or the Ministry of Environment, the same shall not get affected by virtue of the lease deed in any manner.

127. It is further held that since the land which is a part of the lease hold area barring 2 chunks viz. 8.65 acres equivalent to 13 Bighas 17 Biswas of land and 14.15 acres of land approximately 22 Bighas 10 Biswas, in all 35 bighas and 27 biswas equivalent to 22.80 acres, the Wetland Rules of 2010 shall not apply to the project since environment clearance had already been issued under PIA 2006 prior to commencement of the project. In any view the lease hold area barring the land equivalent to 35 bighas and 27 biswas having not been held as wetland or lakebed as per the revenue record as also the fact that it was available for development way back from 1982 which gets established from the various Master Plans of Jaipur and the historical background referred to hereinbefore, no dispute relating to application of the Wetland Rules 2010 shall be allowed to be raised hereinafter with retrospective effect in regard to the lease hold area of the land which has been granted for development of the project and could not be proved to be wetland barring 22.80 acres equivalent to 35 bighas and 17 biswas. It is further clear by now that the project comprising the lease hold land is not in conflict with the development of lake area or Jal Mahal monument so as to raise issues or concern regarding the lake area or environment degradation as restoration and maintenance of Jal Mahal cannot possibly disturb the monument or lead to environmental degradation. In any view, the dispute being confined to the lease hold area for development of the project which we have now resolved, we direct that the appellant/lessee shall be entitled to re-start the project forthwith subject to what we have recorded hereinbefore.

128. The judgment and order of the High Court thus stands quashed and set aside to the extent by which the lease deed has been cancelled except an area of 13 bighas 17 biswas equivalent to 8.65 acres and the balance disputed area claimed to be lake bed comprising 14.15 acres shall be notionally treated as part of the lease deed but the same shall remain a construction free zone where neither the State Government of Rajasthan nor the appellant-lessee/Jal Mahal Resorts Pvt. Ltd. shall have the right to raise any construction on this area as the same shall remain exclusively for the use of public promenade / walkway free of charge.

129. In view of the analysis made hereinbefore, these appeals stand partly allowed to the extent indicated hereinabove but in the circumstance, the parties are directed to bear their own costs.

April 25, 2014