Saroj Screens Pvt.Ltd vs Ghahshyam & Ors

3.1 After about 3 years, Gopaldas Mohta leased out the plot to the appellant for a period of 27 years (from 28.3.1947 to 16.3.1974). The relevant portions of deed dated 10.9.1947 executed between Gopaldas Mohta and the appellant read as under:

5. The lessees shall have the option to pay to the lessor a sum of Rs. 90,000/- (Rupees Ninety Thousand only) at any time during the first five years of the lease and to purchase all the rights of the Lessor under said Head Lease from the Municipal Committee, Nagpur, together with his rights over the plinth and the material and on this amount being paid as per this conditions, the lessor shall be bound to execute the necessary assignment or other assurance in favour of the lessees at the cost and expenses of the lessees. The lessees shall have also the option to acquire the said interest from the lessor at any time, on payment of the same price, namely Rs. 90,000/- only during the last year before the expiry of the lease by afflux of time.

3.4 The suit filed by the appellant was decreed by Civil Judge, Senior Division, Nagpur (hereinafter referred to as, 'the trial Court') vide judgment dated 28.4.1980 but the same was reversed by the High Court in First Appeal Nos. 95 of 1980 and 96 of 1980 filed by the heirs of Parmanand Mundhada and respondent No.2 and the Corporation respectively. The relevant portions of the High Court's judgment dated 25.7.1991 are extracted below:

21. Therefore, no doubt is left in our mind that the plaintiff came forward seeking implementation of a different contract than the one agreed between the parties. Apparently the plaintiff had no desire to pay the amount of Rs.90,000/- till such time the lease is renewed. There was neither readiness or willingness on the part of the plaintiff to implement the contract. We hence answer the point at issue in the negative. The learned Court below had completely misdirected itself in coming to a contrary conclusion not warranted by the facts on record."

3.12 At this stage, it will be appropriate to mention that during the pendency of Writ Petition No.1613 of 1992, respondent nos.1 and 2 filed Special Civil Suit No.1135 of 1993 for eviction of the appellant, possession of the suit property and recovery of damages by alleging that Resolution dated 28.8.1991 was illegal and without jurisdiction and lease deed dated 4.9.1991 executed in favour of the appellant did not create any rights in its favour.

3.13 After filing the written statement in Writ Petition No.1613 of 1992, the Corporation passed Resolution dated 22.7.1996 and cancelled the lease granted to the appellant on the ground that previous sanction of the State Government had not been obtained as per the requirement of Section 70(5) of the Act. The appellant questioned this action of the Corporation in Writ Petition No.1786 of 1996. By an interim order dated 14.8.1996, the High Court directed that status quo be maintained regarding possession of the plot. After 1 year and about 8 months, the Corporation sent letter dated 27.4.1998 to the appellant and gave an assurance for restoration of the lease subject to the condition that it shall have to withdraw the writ petition. Thereupon, the appellant filed an application dated 6.5.1998 with a prayer that it may be allowed to withdraw the writ petition. The same remained pending till 18.10.2001, on which date the High Court dismissed Writ Petition No.1786 of 1996 as withdrawn.

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.

22. In the result, the appeals are dismissed. The appellant shall hand over possession of the plot to the Corporation within a period of three months. After taking possession of the plot, the Corporation shall alienate the same by sale, lease, or otherwise by auction or by inviting tenders and after following a procedure consistent with Article 14 of the Constitution. The Corporation shall pay market value of the structure, as obtaining on the date of the order of the High Court to the appellant.