Case: Collector, Distt. Gwalior &amp; Another Vs. Cine Exhibitors P. Ltd. &amp; Another

GDA issued an advertisement for allotment of plot No. 1 admeasuring 40160 sq. feet situated in the locality known as Mayur Market for the purpose of construction of a cinema house and, in the public auction, the respondent-company, the first respondent herein, became the highest bidder and accordingly, a lease agreement was executed on 27.5.1978 between the GDA and the respondent company. The said lease agreement was for a period of thirty years with the stipulation of a right of renewal subject to certain conditions. It was asserted in the writ petition that after execution of the lease deed, the respondent company constructed a cinema hall and commenced the business. As certain disputes arose between the directors of the company, it was eventually resolved that the licence for running the cinema should be surrendered and in consonance with the resolution, a letter was issued to the Collector concerned, who cancelled the licence for running the cinema hall. After closure of the cinema hall, the GDA, by communication dated 2.8.2002, terminated the lease and directed for handing over possession of the land in question4. It was contended before the learned Single Judge that the notice for cancellation of lease was not served on it and the allegations that there had been violation of the terms and conditions of the agreement were absolutely unsustainable and, therefore, the eventual act of termination was sensitively susceptible. It was also urged that as permission was granted for raising permanent construction, the lease had the character of a permanent lease and could not have been terminated by the GDA. The GDA combated the aforesaid stand put forth by the respondent-company and countered the same by contending, inter alia, that there had been violation of the terms and conditions of the agreement; that the stance of putting the lease on the pedestal of a permanent lease was sans substance; that the plea that the notice for cancellation of lease was not served was contrary to the documents brought on record; that reminders were served on the respondent-company; that the lease was granted for a specific purpose and when the said purpose had totally melted into extinction, it was within the legal province of the GDA to cancel the lease and take appropriate steps for eviction5. The learned Single Judge took note of the proponements canvassed by the learned counsel for the parties and posed the question whether the GDA had the right to terminate the lease of the petitioner and, thereafter, scanning the terms and conditions of the lease deed, expressed the view that as there has been cancellation of the licence of the cinema hall, the order of termination of the lease was valid and the petitioner would have an opportunity of hearing before steps are taken for its dispossession. Being of this view, he dismissed the writ petition. Be it noted, a contention was raised before the learned Single Judge that the land in question is owned by the State but the same was granted on lease by the GDA, which is absolutely impermissible, however, the learned Single Judge did not think it appropriate to dwell upon the same on the foundation that the said question will be decided when the State Government takes any action against the petitioner by the respondent GDA6. Being dissatisfied with the aforesaid order, the first respondent preferred a writ appeal and the Division Bench in the intra-court appeal expressed the opinion that no notice of termination of lease was given despite the same being imperative and secondly, there was no commission of breach of the express conditions of the lease deed and hence, the cancellation was totally unsustainable. With regard to taking over possession, the Division Bench opined that the authority cannot assume the jurisdiction of taking possession without taking recourse to law. It is apt to note that on behalf of the State, a stand was vigorously canvassed that when there has been no transfer of the land by the State in favour of the GDA, the grant of lease by the GDA in favour of the first respondent-company is ab initio void and, therefore, no right flows in favour of the said respondent to retain the possession. The learned Judges repelled the said stand on the base that when the GDA had granted lease in the auction that was conducted with the knowledge of the State, it is estopped from raising the plea that the land had not been transferred to the GDA. Expressing this view, the appeal was dismissed in the ultimate eventuality

Court's reasoning:
19. The Revenue Book Circular also stipulates that the classification of land is done at the time of settlement. The Collector of the district has been bestowed with the power to make alterations in the settlement classifications on the ground that they have been incorrectly made or that the purpose for which the land was used had changed in the settlement. In such type of cases, Abadi lands are recorded as nazul lands and, accordingly, the vacant spaces are administered as nazul lands. The aforesaid schematic concept read with the language employed in the 1960 Act and the 1973 Act would clearly reveal that nazul land, unless notified, does not automatically get vested in any authority or trust. The State Government, from time to time, has been issuing notifications to the effect of vesting or transferring of nazul land to be part of improvement trust and giving advance possession to the Town Improvement Trust. That apart, the State Government has issued notifications framing guidelines for distribution of the Nazul plots20. It is not out of place to mention here that this Court in Akhil Bhartiya Upbhokta Congress vs. State of Madhya Pradesh and Ors (AIR 2011 SC 1834 ). had not approved the manner in which the State Government had granted the land belonging to the State in favour of the appellant thereinAfter referring to the Revenue Book Circular, this Court decried the action of the State Authorities in allotment of Nazul land without following the criteria and by treating it as State largesse wherein the public has an interest. After the said decision was rendered on 06.04.2011, the State of Madhya Pradesh, Department of Revenue, has issued Circular No. 6-53/2011-Nazul dated 8.8.2011 describing certain guidelines in the distribution of Nazul land. In the said circular, it has been stated that the said circular shall be treated as a part of Section 1 of the Revenue Book Circular21. We have referred to these aspects singularly to highlight that unless affirmative steps are taken by the State Government by issuing a notification changing the character of the land and transferring it in favour of any authority, corporation or municipality, it maintains its own character, i.e., nazul land. In the case at hand, the land is recorded as nazul land for the Public Works Department. Nothing has been brought on record that it had ever been notified for transfer in favour of the GDA. Thus analysed, the GDA never became the owner of the land or had the authority to deal with the land and, therefore, it could not have put the land to auction for any purpose whatsoever. Ergo, the first respondent cannot assert any right or advance any claim to remain in possession and run the cinema hall and that too after cancellation of the licence, solely on the basis of a lease granted by its lessor, a statutory authority, who had no right on the land for the simon pure reason that the ownership still remained with the State Government. When no right lies with the GDA in respect of the land in view of the conditions precedent as stipulated in the Revenue Book Circular not having been satisfied and the nature of the land has remained in a sustained state, no legal sanctity can be attached to the lease executed by it in favour of the Ist respondent. The grant is fundamentally ultra vires and hence, the respondent-company has to meet its Waterloo22. Quite apart from the above, it is condign to note that in a case of the present nature, the common law doctrine of public policy can be invoked. The said doctrine becomes enforceable when an action affects or offends public interest or where injury to the public at large is manifest. As is perceptible, the GDA could not have granted the lease of the property belonging to the State Government as it was Nazul land meant for the Public Works Department. The collective interest in the property could not have been jeopardised by usurpation of power/authority by the GDA. Such assumption of power by the GDA makes the whole action sans substratum and thereby a nullity. Needless to say, any grant has to have legal sanctity and legitimacy.