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

A. That a huge area of land admeasuring 607 Bighas and 5 Biswas situate in the revenue estate of villages Durgapura, Jhalan Chod, Sanganer and Dhol-ka-Bad in District Jaipur, stood notified under Section 4(1) of the Rajasthan Land Acquisition Act, 1953 (hereinafter referred to as theDeclaration under Section 6 of the Act was made on 22.6.1982 for the land admeasuring 591 Bighas and 17 Biswas. After meeting all requisite statutory requirements contained in the Act, possession of the land, was taken over by the Government and was subsequently handed over to appellant-RIICO, on 18.10.1982 and 17.11.1983. The Land Acquisition Collector assessed the market value of the land and made an award on 14.5.1984. RIICO made allotment of land admeasuring 105 acres vide allotment letter dated 10.3.1988 to the respondent no.1 company, to facilitate the establishment of a Gem Industrial Estate for the manufacturing of Gem stones.C. In pursuance of the aforesaid allotment letter, a lease deed was executed between the appellant and respondent-company on 22.5.1989, with a clear stipulation that the land was allotted on anand that the respondent-company must complete the said project within a period of 5 years, and further that, in the event that the terms and conditions of the lease agreement were not complied with, the appellant would be entitled to recover its possession in addition to which, various other conditions were also incorporated therein.D. After possession was taken by the respondent-company, construction could be carried only on a portion of the land allotted to it. As the development work was being carried out at an extremely slow pace, the appellant issued various notices from time to time, reminding the respondent-company that it was under an obligation to complete the project within a specified period, owing to which, it must accelerate work. Additionally, there also arose some difficulty with respect to theattempts to sub-lease the said premises, or parts thereof, and in view of this, an amendment dated 4.11.1991 was inserted in Rule 11-A of the Rajasthan Land Revenue (Industrial area Allotment) Rules, 1959 (hereinafter referred to as the ‘Rulesenabling the company to sub-lease the said land.E. The appellant vide notice dated 4.7.1992, informed the respondent-company, that as per clause 2(n) of the lease deed, all construction had to be completed within a stipulated time period of 5 years. The respondent-company began asking the appellant to provide it accessibility via road, from the Jaipur Tonk main road and, as the same was not provided, the respondent-company filed Writ Petition No. 5481 of 1994 before the High Court, seeking the issuance of a direction to the appellant to provide to it, the aforesaid road.F. During the pendency of the aforesaid writ petition, the appellant expressing its dis-satisfaction with regard to the progress of the development of the said land by the respondent-company, filed a reply to the said writ petition before the High Court stating that it was not under any obligation to provide to the respondent-company the aforementioned approach road, as the lease deed had been executed between them, on the basis of ant. Further, the appellant issued a show cause notice dated 29.8.1996, to determine the lease in light of the lease agreement, in lieu of the fact that the respondent-company had not made any progress regarding the completion of the project, and even after the expiry of a period of 5 years, only 10% of the total construction stood completed. In pursuance thereof, the lease deed was cancelled vide order dated 1.10.1996, and possession of the land in dispute was taken back by the appellant on 3.10.1996.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.Hence, these appeals.

Court's reasoning:
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.