REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 2548 OF 2006
State of West Bengal and others …..Appellant(s)
versus
Calcutta Mineral Supply Co. Pvt. Ltd.
and another ...Respondent(s)
WITH
CIVIL APPEAL NOs. 2549 OF 2006
Collector, Jalpaiguri and another …..Appellant(s)
versus
Darjeeling Dooars Plantations (Tea) Ltd.
and another ...Respondent(s)
JUDGMENT
M. Y. EQBAL, J.
These appeals by special leave are directed against the common
judgment and order dated 6.10.2005 of the Calcutta High Court, whereby
Division Bench of the High Court allowed the writ petitions preferred by
the respondents herein against the decision of the West Bengal Land Reforms
and Tenancy Tribunal (in short, ‘the Tribunal’) dismissing their original
applications moved against the respective order passed by the Government of
West Bengal resuming the lands held by them.
2. By the impugned judgment, the High Court has disposed of three writ
petitions primarily observing that although the facts are different there
are certain communions of identity within the question to be answered and
certain common principles of law are involved in the writ petitions.
3. In the matter of Calcutta Mineral Supply Co. Pvt. Ltd. (being Civil
Appeal No.2548 of 2006), the respondent-writ petitioner held the land
measuring about 4.54 acres comprised in a factory or mill together with
structures even before the West Bengal Estates Acquisition Act, 1953 (in
short, ‘WBEA Act’) came into force. Factual matrix of this case is that as
a result of notification under Section 4 and effects thereof under Section
5 of the WBEA Act all the land comprised in factory vested in the State.
However, by reason of Section 6(1)(g) read with Section 6(3) of that Act,
the Company was allowed to retain all the lands comprised in factory as the
State Government was of the opinion that the Company required all the lands
for the purpose of the factory.
4. However, in 1996, it came to the notice of the State Government that
the Company had alienated almost half of the land and no land was being
used for the purpose of the factory, which remained closed since 1993. In
exercise of the power conferred on it by the proviso to Section 6(3) of the
Act, the State Government by order dated 2nd April, 1996 revised the order
and resumed 3.76 acres of land as surplus as in the opinion of the State
Government the company did not require the land for the purpose of running
its factory. The Company challenged that order by way of a writ petition,
which stood transmitted to the aforesaid Tribunal and was dismissed.
Aggrieved by the decision of the Tribunal, the Company preferred writ
petition before the High Court. The Division Bench of the High Court set
aside order of the Tribunal holding that order dated 2nd April, 1996 was
not a speaking order and directing the State Government to consider the
matter afresh. Thereafter, Special Secretary of the State Government
passed speaking order directing resumption of the land allowed to be
retained by the respondent-Company. This order was challenged by the
respondents, but the Tribunal dismissed their application.
5. Aggrieved by the decision of the Tribunal, Company again moved the
High Court by way of a writ petition, which was allowed by the Division
Bench of the High Court by the impugned judgment. The High Court quashed
the order of resumption passed by the State Government as also the judgment
of the Tribunal and held that the exercise of power under the WBEA Act in
the instant case was without jurisdiction and that the respondents having
held land within the ceiling limit had acquired the status of raiyat with
heritable and transferable right and cannot be subjected to Section 14-Z of
the West Bengal Land Reforms Act.
6. In the matter of Darjeeling Dooars Plantations (Tea) Ltd. (being
Civil Appeal No.2549 of 2006), the tea estate known as Zurantee Tea Estate
(Zurantee) was leased out by the Government of West Bengal in favour of
Chulsa Tea Company (in short, ‘Chulsa’) being limited for a period of 30
years on 30th January, 1975. In the record of right prepared under the
WBEA Act, the land was recorded to have been permitted to be retained under
Section 6(3) of the WBEA Act. The original lease was granted on 1st April,
1924 and expired before the WBEA Act came into force. In 1976, Chulsa sold
Zurantee to Darjeeling Dooars Plantations (Tea) Ltd. (in short, ‘respondent-
Company’).
7. By an order dated 25th August, 1976, the tea estate was mutated in
favour of respondent-Company. In a Company Petition of 1990, High Court
had allowed a scheme of amalgamation between the respondent-Company, the
transferor, and Karala Valley Tea Co. Ltd. (in short, ‘Karala’), the
transferee, under which Scheme, the name of transferee Karala was changed
to Darjeeling Dooars and all rights, title and interest of Darjeeling
Dooars vested in it. Subsequently by an order dated 18th November, 1991,
the Land Registration Collector allowed mutation of the name in respect of
Zurantee in favour of Darjeeling Dooars.
8. The Government of West Bengal issued a notification on 1st June, 1994
amending Schedule ‘F’ of the WBEA Rules inserting Clause 1A and 1B to be
incorporated in the lease requiring payment of salami of Rs.15,000/- per
hectare of land leased out before further renewal of the lease in cases
renewal was asked for by a transferee allowing the transferee to enjoy the
balance period of the lease transferred. The respondent-Company applied
for the renewal of lease of the Zurantee for a period of 30 years on 10th
March, 1998 and a deed renewing the lease was executed on 12th March, 1998
in favour of the respondent-Company. In March, 2002, the Collector demanded
a sum of Rs.1,10,50,200/- as salami in respect of renewal of the said lease
pursuant to the amended clause, which was challenged by the respondent-
Company before the Tribunal. Upon the matter being remanded by the
Tribunal, the Collector again held that the respondent-Company was liable
to pay salami and directed the Company to deposit the same. The respondent-
Company again moved before the Tribunal by way of an application, which was
dismissed. The Tribunal upheld the notification imposing salami on
transfer of tea estate. Aggrieved by the order, the respondent-Company
moved the High Court by way of writ petition, which was allowed by the
Division Bench of the High Court by the impugned judgment. Holding that
the respondent-Company was entitled to renewal of the lease without payment
of salami, the High Court quashed the order of the Tribunal as well as the
order of the Collector and the letter of demand.
9. Hence, these two appeals by special leave have been preferred by the
State Government and its functionaries under Article 136 of the
Constitution.
10. Now we shall discuss the facts and law applicable thereto separately
for better appreciation of the case of the parties.
Civil Appeal No.2549 of 2006
(Collector, Jalpaiguri and another vs. Darjeeling Dooars Plantations
(Tea) Ltd. and another)
11. Admittedly in the year 1924, the appellant granted a lease of the
property for a period of 30 years, which expired in 1954. The respondent
continued in possession till 1974 when a fresh lease deed was executed on
30.1.1975 in favour of Chulsa Tea Company Limited in respect of Zurantee
Garden. The lease was made effective from 25.3.1968. Some of the terms
and conditions of the lease which are relevant in the present case, are as
under:
“(4)(a) That the Lessee/Lessees shall at all times observe and conform to
the relevant provisions of the West Bengal Estates Acquisition Rules for
the time being in force.
(b) That in respect of land comprised in a forest the Lessee/Lessees
shall be subject to the control and supervision of the State Government.
xxxxxxxx
(13) (a) That the Lessee shall not transfer, whether in full or in part, or
club or amalgamate tea-gardens without the formal sanction of the
Collector;
Provided that except in cases where the provisions of the West Bengal
Alienation of Land (Regulation) Act, 1960 (West Bengal Act XVI of 1960),
apply, no such sanction shall be necessary for equitable mortgage of a tea-
garden with a Scheduled Bank by the deposit of title deeds. All such
equitable mortgages shall, however, be referred to the Collector
immediately.
(b) That the lease-hold interest shall be heritable.
(c) That in the case of a transfer of such lease-hold interest, whether
in full or in part, the same shall be subject to the provision of any law
for the time being in force and applicable thereto and also subject to
prior consent of the Collector.
xxxxxxxx
(16) (a) That the Lessee/Lessees shall be entitled to the renewal of the
lease for a further period of thirty years and to successive renewals for
similar periods, subject to the rules and the terms and conditions of this
lease and the such other terms and conditions as the State Government may
from time to time consider it necessary to impose and include in such
renewed lease or leases and subject further to such rent as may then be
fixed, provided that such additional terms and conditions shall not be
inconsistent with the law regulating such lease and shall not have
retrospective effect.”
12. From the aforementioned terms and conditions contained in the lease
deed of 1975, it is clear that the respondent lessee shall observe and
conform to the relevant provisions of the West Bengal Estates Acquisition
Rules for the time being in force. Clause 13(a) further provides that the
lessee shall not transfer without the formal sanction of the Collector and
Clause 13(c) provides that the transfer shall be subject to any law for the
time being in force and also subject to prior consent of the Collector.
13. Clause 16(a) of the lease deed contains a renewal clause according to
which the lessee shall be entitled to the renewal of the lease for a
further period of thirty years and to successive renewals for similar
periods, subject to the rules and the terms and conditions of this lease
and also such other terms and conditions as the State Government may from
time to time consider it necessary to impose and include in such renewed
lease or leases and subject further to such rent as may then be fixed.
However, such additional terms and conditions shall not be inconsistent
with the law regulating such lease and shall not have retrospective effect.
14. Indisputably, during the subsistence of the lease, the respondent
Darjeeling Dooars Plantations (Tea) Ltd. and the Karala Valley Tea Company
were amalgamated and all the properties, rights and interest stood
transferred to the respondent Darjeeling Dooars Plantations (Tea) Ltd. by
the order passed by the Calcutta High Court on 31.10.1990 in a Company
petition. It is also not in dispute that the name of the respondent
Darjeeling Dooars Plantations (Tea) Ltd. was mutated by the order of the
Collector dated 28.11.1991.
15. Originally the lease was granted in the year 1924 for a period of 30
years. Before the expiry of the period of lease, the West Bengal Estates
Acquisition Act, 1953 came into force in the State of West Bengal.
According to Section 4 of the Act, all estates and the rights of every
intermediary in each such estate stood vested in the State free from all
encumbrances with effect from the date of notification time to time issued
by the State Government. Section 5 of the said Act deals with the effect
of the notification. Section 6 of the said Act lays down the provisions
with regard to right of intermediary to retain certain lands. Section 6
reads as under:
“6. (1) Notwithstanding anything contained in sections 4 and 5, an
intermediary shall, except in the cases mentioned in the proviso to sub-
section (2) but subject to the other provisions of that sub-section, be
entitled to retain with effect from the date of vesting—
(a) xxxxxxxxxx
(b) xxxxxxxxxx
(c) xxxxxxxxxx
(d) xxxxxxxxxx
(e) xxxxxxxxxx
(f) subject to the provisions of sub-section (3), land comprised in tea
gardens or orchards or land used for the purpose of livestock breeding,
poultry farming or dairy;
(g) xxxxxxxxxx
xxxxxxxxxx
(2) An intermediary who is entitled to retain possession of any land under
sub-section (1) shall be deemed to hold such land directly under the State
from the date of vesting as a tenant, subject to such terms and conditions
as may be prescribed and subject to payment of such rent as may be
determined under the provisions of this Act and as entered in the record-of-
rights finally published under Chapter V except that no rent shall be
payable for land referred to in clause (h) or (i) :
Provided that if any tank fishery or any land comprised in a tea-garden,
orchard, mill, factory or workshop was held immediately before the date of
vesting under a lease, such lease shall be deemed to have been given by the
state Government on the same terms and conditions as immediately before
such date subject to such modification therein as the State Government may
think fit to make.
(3) In the case of land comprised in a tea-garden, mill, factory or
workshop the intermediary, or where the land is held under a lease, the
lessee, shall be entitled to retain only so much of such land as, in the
opinion of the State Government, is required for the tea-garden, mill
factory or workshop, as the case may be, and a person holding under to be
an intermediary:
Provided that the State Government may, if it thinks fit so to do after
reviewing the circumstances of a case and after giving the intermediary or
the lessee, as the case may be, an opportunity of being heard, revise any
order made by it under this sub-section specifying the land which the
intermediary or the lessee shall be entitled to retain as being required by
him for the tea-garden, mill, factory or workshop, as the case may be.
Explanation:—The expression “land held under a lease” includes any land
held directly under the State under a lease.
Exception:-In the case of land allowed to be retained by an intermediary or
lessee in respect of a tea-garden, such land may include any land comprised
in a forest if, in the opinion of the State Government, the land comprised
in a forest is required for the tea-garden.”
16. Reading relevant provisions of Section 6, it is manifest that an
intermediary, in possession of the land including tea garden, shall be
entitled to retain subject to the provisions contained in sub-section (3)
of Section 6 of the said Act. Sub-section 3 very clearly provides that the
lessee in possession of tea garden etc. shall continue and shall be deemed
to be an intermediary.
17. Section 59 of the WBEA Act empowers the State Government to frame
rules for carrying out the purpose of the Act. Section 59 of the Act reads
as under:
“Section 59 - Power to make rules
(1) The State Government may, after previous publication, make rules for
carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing
power, such rules may provide for all or any of the matters which, under
any provision of this Act, are required to be prescribed or to be provided
for by rules.”
18. In exercise of the power conferred by Section 59 of the Act, the West
Bengal Estates Acquisition Rules, 1954 was framed and the same was
published in the official Gazette vide Notification dated 28.5.1954. Rule
4 of the said Rules inter alia provides that the land retained by an
intermediary under the provisions of sub-section (1) of Section 6 shall be
held by him from the date of vesting on the terms and conditions specified
in the Rules. So far as the tea garden is concerned, it has been
specifically provided that an intermediary shall hold such land on the
terms and conditions set out in Schedule F appended to the Rules.
Therefore, for better appreciation, Schedule F and the Form-1 for the
purpose of granting lease for tea garden have been reproduced here.
“SCHEDULE F
[Rule 4]
Land comprised in a tea garden retained by an intermediary under sub-
section (1), read with sub-section (3), of section 6 shall be deemed to be
held directly under the State from the date of vesting as a tenant [until a
lease is granted in Form I appended to this schedule, on such terms and
conditions as may be specified by the Collector in a summary settlement,
and thereafter, on a lease being granted in Form I appended to this
schedule, on the terms and conditions specified in such lease]. There
shall be a lease in Form I in respect of each such intermediary, and the
same shall be registered and numbered in the office of the Collector.
1A xxxxxxxxxxxxxxxxxxxx
1B xxxxxxxxxxxxxxxxxxxx
The first lease shall be given from the date of the order under sub-section
(3) of section 6 or from the date of the determination of the rent under
section 42, whichever is later.”
19. By Notification dated 1.6.1994 issued by the Government of West
Bengal, Land & Land Reforms Department, an amendment has been brought in
Schedule F to the said Rules discussed hereinabove. By the said
notification, two sub-paragraphs being 1A and 1B were inserted, which are
reproduced hereunder:
“1A. When the lease of a tea garden is determined and the tea garden is
leased afresh to a new lessee, the later shall be liable to pay salami at
the rate of Rs.15,000/- per hectare of the land leased out.
1B. In case of a transfer of the leasehold interest, except by way of
inheritance, the transferee shall not be liable to pay salami during the
unexpired period of the lease. On the expiry of the transferred lease, he
shall be liable to pay salami at the rate of Rs.15,000/- per hectare of the
land leased out before the lease is further renewed.”
20. In Clause (13), sub-clause (dd) was also inserted, which is quoted
hereinbelow:
“(dd) That the transferee, other than by inheritance, shall be required to
enter into a fresh lease on payment of salami at the rate laid down in
paragraph 1B of Schedule F within three months of expiry of the unexpired
period of lease.”
21. It is therefore manifest that when a lease of the tea garden is
determined by efflux of time and a lease is granted afresh to new lessee,
the latter shall be liable to pay salami at the rate of Rs.15,000/- per
hectare of the land leased out. Clause 1B also provides that the
transferee shall not be liable to pay salami during the unexpired period,
but on the expiry of the lease, he shall be liable to pay salami at the
rate of Rs.15,000/- per hectare of the land leased out before the lease is
further renewed.
22. Admittedly, the lease of 1975, which became effective from 1968, got
expired in the year 1998. The respondent then approached the Government
for renewal of the lease. The Collector prepared a lease deed
incorporating the terms and conditions contained in the earlier lease and
referred it to the Government for final approval. The request of the
respondent for grant of lease was considered by the Government and by order
as contained in letter dated 5.10.2001, addressed to the District
Magistrate & Collector, Jalpaiguri, informed that the Government will
accord post facto approval to the renewal of the lease for a further period
of 30 years on payment of salami of Rs.15,000/- per hectare. The letter
dated 5.10.2001 is reproduced hereunder:
“Government of West Bengal
Land and Land Revenue Department
Land Reforms Branch
L.R. Bench
No.4051-LR/3T-69/04
Dated, Kolkata, the 5th October, 2001
From: The Deputy Secretary to the Govt. of West Bengal
To: The District Magistrate & Collector, Jalpaiguri, P.O. & Dist.
Jalpaiguri.
Sub: Proposal for post-factor approval to the renewal of lease of the land
comprised in Zurantee Tea Garden in Jalpaiguri District.
The undersigned is directed to refer to the above subject and to say
that post-facto approval to the renewal of lease of the land comprised in
Zurantee Tea Garden for the period of 30 years in favour of M/s. Darjeeling
Dooars Plantation (Tea) Limited will be accorded after salami @ Rs.15,000/-
per hectare and other dues, if any, are realized from the concerned
Company. Till such post-facto approval is accorded, renewal accorded by
him will remain inoperative.
He is, therefore, requested to realize all the dues and report
compliance thereof to the Department with the certificate that there is no
arrear dues from the concerned companies so as to enable the Govt. in the
Land & Land Reforms Department to accord necessary post-facto approval as
so proposed by him.
He is also requested to furnish the copy of relevant documents particularly
the copy of the High Court’s order and copy of certificate of incorporation
issued by the Registrar of Companies based on which Mutation case no. IV-5
of 1991-92 was finalized and mutation was allowed.
Sd/-
Deputy Secretary to the Govt. of West Bengal”
23. In pursuance to the decision taken by the State Government, an order
was passed by the Collector, Jalpaiguri dated 29.11.2002 directing the
respondent to deposit Rs.15,000/- per hectare as salami at the time of
renewal before according approval of the Land & Land Revenue Department.
The order was communicated to the respondent and the same came to be
challenged before the Land Reforms and Tenancy Tribunal. The respondent
sought a declaration that the Notification dated 1.6.1994 and amendments of
the Rules in Schedule F and Form 1 thereto are illegal and
unconstitutional. The said application was rejected by the Tribunal.
However, by the impugned order, the High Court allowed the writ petition
and quashed the order of the Tribunal.
24. We have heard Mr. Rakesh Dwivedi, learned senior counsel appearing
for the appellant-State and Mr. A.K. Ganguli, learned senior counsel
appearing for the respondent-Company in Civil Appeal No.2549 of 2006.
25. Mr. Dwivedi assailed the order of the High Court as being contrary to
the facts of the case and mis-appreciating the status of the respondent by
recognizing it as a lessee and not as a transferee. Mr. Dwivedi submitted
that Clause 1A and 1B, as inserted by the amendment, will apply on its own
course as even the inclusion of these clauses in the lease deed is not
necessary. According to the learned counsel, Clause 16(a) was already
there in the previous lease and as per the said clause additional
conditions to the subsequent lease can be included. Mr. Dwivedi submitted
that post facto sanction by the State Government is a pre-condition for
payment of salami and for that reason the lease deed executed by the
respondent was signed by the Collector and forwarded to the State
Government for sanction. According to Mr. Dwivedi, renewal of lease is a
fresh one and lessor, namely the State, is entitled to include additional
terms and conditions in the said document of lease.
26. Mr. A.K. Ganguli, learned senior counsel appearing for the
respondent, on the other hand contended that the lease granted to the
predecessor-in-interest of the respondent is statutory lease governed by
the Act and the Rules made thereunder and unless and until the amendments
brought in by the notification dated 1.6.1994 and incorporated in Form 1,
salami cannot be realised. According to the learned counsel, the
respondent-Company came into existence much before the transfer of the
leasehold interest, by virtue of amalgamation and the order passed by the
High Court in the Company Petition. According to Mr. Ganguli, the
respondent is in the nature of joint venture Company. Learned senior
counsel relied upon decision of this Court in the case of New Horizons Ltd.
vs. Union of India (1995) 1 SCC 478 and in the case of State of U.P. vs.
Lalji Tandon, (2004) 1 SCC 1.
27. Perusal of the impugned order passed by the High Court would show
that although the High Court took notice of clause 16(a) of the lease deed
and amendment brought in the Schedule F and Form 1 of the Rules it came to
the following conclusion:
“22.1. These terms of renewal are clear and unambiguous and these are terms
exactly, which is provided in Schedule "F" Form-I of the WBEA Rules. In
terms of the conditions contained in Clause 16(a), the State
Government/lessor was entitled to incorporate additional terms and
conditions consistent with the law regulating the lease with prospective
effect in the renewed lease. This lease was granted in terms of Rule 4 of
the WBEA Rules in terms of Schedule "F" in Form-I. The State is entitled
only to incorporate additional conditions in the renewed lease with
prospective effect. Therefore, the amendment, if any, incorporated in
Schedule "F" by reason of the amendment effective from 1st of June, 1994
would not be effective in respect of unexpired period of the lease to which
the Darjeeling Dooars had stepped into. Therefore, under Clause 16(a) read
with Schedule "F", Darjeeling Dooars was entitled to renewal of the lease
on the same terms and conditions. The amendment brought about could not be
given retrospective effect to affect the right of the lessee/transferee
stepping into the shoes of the transferor-lessee to obtain further renewal
of the lease for further period of 30 years and to successive renewals for
similar periods. The only liberty the State Government had under the said
clause is that it can impose and include in the said renewed lease
additional terms and conditions not inconsistent with Rule 4 Schedule "F"
and Form-I of the WBEA Rules without retrospective effect.
22.2. Therefore, the amendment brought about in Schedule "F" could be
incorporated in the renewed lease and was so rightly incorporated in the
1998 lease. As such the conditions so incorporated became part of the
renewed lease and would govern the terms and conditions of the renewed
lease and that too prospectively. These additional terms and conditions
incorporated in the renewed lease became effective after the lease was
renewed, namely when the right to renew the lease was exercised and upon
such exercise the right came to an end and the renewal of the lease being a
fresh lease, these terms cannot operate to affect a situation prior to the
renewal of the lease. In terms of these additional conditions, the salami
is payable in consideration of the renewal after the expiry of the renewed
lease containing the terms. A term, which was not in existence in the lease
sought to be renewed within the scope of Clause 16(a), could not govern the
right of the lessee to obtain renewal of the right or the State to impose
conditions for renewal on the basis of Clause 16(a) of the 1975 lease, as
was held in Delhi Development Authority v. Durga Chand Kaushish [1974] 1
SCR 535 .
xxxxxxxxxx
22.4. The amendment also does not provide that the amended clauses would
have retrospective operation. In any event, the terms of the lease cannot
be substituted even by legislation. No vested right, particularly, in
respect of fiscal or revenue matters already accrued could be taken away
through legislation; neither any legislation in that respect could be
retrospective in operation.
Conclusion:
23. In these circumstances, the additional terms contained in the renewed
lease would be effective at the time of renewal of the renewed lease
entitling the State of demand salami in terms of Clause 1B from the
transferee if there is any transfer. However, salami can be demanded by the
State under Clause 1A upon determination of the lease from the person to
whom the fresh lease is granted after the 1994 Amendment of the WBEA Rules
even if Clause 1A was not incorporated in the lease determined.
23.1. In these circumstances, the Government is not entitled to demand
salami in terms of Clauses 1A or 1B incorporated in the renewed lease as a
consideration for the 1998 renewal from the Darjeeling Dooars. Such a
demand is inconsistent with the law regulating such lease and cannot be
retrospective in effect.”
28. We have given our anxious consideration to the reasoning assigned by
the High Court while arriving at such conclusion. In our view, the High
Court has misconstrued and misinterpreted the relevant provisions contained
in the Rules viz-a-viz the condition of renewal as contained in clause
16(a) of the lease deed. The High Court has committed error of law in
holding that the amendment brought about could not be given retrospective
effect to affect the right of the lessee/transferee stepping into the shoes
of the transferee/lessee to obtain further renewal of lease for a further
period of 30 years and to successive renewals for similar periods. The
High Court is not correct in law in holding that the amended clause would
have retrospective operation.
29. Indisputably, the renewal of lease is a fresh grant where the
principal lease executed between the parties containing a clause that the
lease shall have to be renewed by giving a fresh grant in accordance with
the said clause. In the instant case, as per clause 16(a) of the earlier
lease deed, the lease is to be renewed for a further period of 30 years but
subject to the rules and the terms and conditions of the lease and also
such other terms and conditions as the State Government may from time to
time consider it necessary to impose and include in such renewed lease.
Clause 16(a) further provides that additional terms and conditions that may
be considered necessary by the State Government be included but the same
shall not be inconsistent with the law renewing such lease and shall not
have retrospective effect.
30. As noticed above, the State Government by notification dated 1.6.1994
brought amendment in the Rules by incorporating two more conditions i.e.
paragraph 1A and 1B. As per the additional condition, in case of fresh
lease granted by the State in respect of tea garden, the lessee shall be
liable to pay salami at the rate of Rs. 15,000/- per hectare of the land
leased out. However, paragraph 1-B made it clear that in case of transfer
of leasehold interest, the transferee shall not be liable to pay salami
during the unexpired period of lease, but after the expiry of the existing
period of lease the transferee shall be liable to pay salami at the rate of
Rs. 15,000/- per hectare before the lease is further renewed.
31. Admittedly, before the expiry of the lease in question in 1998, the
respondent/transferee stepped into the shoes of the original lessee in the
year 1990. In 1994, by notification dated 1.6.1994, an amendment was
brought in Schedule F of the Rules, as discussed hereinabove, in terms of
clause I-B. Therefore, the respondent shall not be liable to pay salami
during the unexpired period of lease up to 1998. The State Government has
rightly not made any claim for salami for the unexpired period of lease,
but for the fresh renewal of lease after 1998 which is a fresh grant. The
demand of salami by State Government for according sanction for renewal of
lease cannot and shall not by any stretch of imagination be held to be
retrospective.
32. In the case of State of U.P. vs. Lalji Tandon, (2004) 1 SCC 1, this
Court while considering the renewal clause in the lease deed observed:-
“13. In India, a lease may be in perpetuity. Neither the Transfer of
Property Act nor the general law abhors a lease in perpetuity. (Mulla on
the Transfer of Property Act, 9th Edn., 1999, p. 1011.) Where a covenant
for renewal exists, its exercise is, of course, a unilateral act of the
lessee, and the consent of the lessor is unnecessary. (Baker v. Merckel,
also Mulla, ibid., p.1204.) Where the principal lease executed between the
parties containing a covenant for renewal, is renewed in accordance with
the said covenant, whether the renewed lease shall also contain similar
clause for renewal depends on the facts and circumstances of each case,
regard being had to the intention of the parties as displayed in the
original covenant for renewal and the surrounding circumstances. There is a
difference between an extension of lease in accordance with the covenant in
that regard contained in the principal lease and renewal of lease, again in
accordance with the covenant for renewal contained in the original lease.
In the case of extension it is not necessary to have a fresh deed of lease
executed, as the extension of lease for the term agreed upon shall be a
necessary consequence of the clause for extension. However, option for
renewal consistently with the covenant for renewal has to be exercised
consistently with the terms thereof and, if exercised, a fresh deed of
lease shall have to be executed between the parties. Failing the execution
of a fresh deed of lease, another lease for a fixed term shall not come
into existence though the principal lease in spite of the expiry [pic]of
the term thereof may continue by holding over for year by year or month by
month, as the case may be.”
33. In the case of Gajraj Singh & ors. vs. State Transport Appellate
Tribunal & ors., (1997) 1 SCC 650, this Court while considering the term
renewal of lease or licence contained in document, observed that “grant of
renewal is a fresh grant though it breathes life into the operation of the
previous lease or licence granted as per existing appropriate provisions of
the Act, rules or orders or acts intra vires or as per the law in operation
as on the date of renewal”.
34. In the case of M.C. Mehta vs. Union of India & ors., (2004) 12 SCC
118, a Division Bench of this Court was considering the question as to the
effect of notification in such case where the lessee claims renewal of
mining lease. Some of the leases were granted for extraction of minerals.
In the mean time, the notification dated 27.1.1994 was issued by Ministry
of Environment and Forest, Government of India in exercise of power
conferred by Environment (Protection) Act, 1986 putting a restriction to
the grant of mining lease without the clearance of the State Government in
accordance with the procedure specified in the notification. Rejecting the
contention made by the lessee this Court observed:-
“77. We are unable to accept the contention that the notification dated 27-
1-1994 would not apply to leases which come up for consideration for
renewal after issue of the notification. The notification mandates that the
mining operation shall not be undertaken in any part of India unless
environmental clearance by the Central Government has been accorded. The
clearance under the notification is valid for a period of five years. In
none of the leases the requirements of the notification were complied with
either at the stage of initial grant of the mining lease or at the stage of
renewal. Some of the leases were fresh leases granted after issue of the
notification. Some were cases of renewal. No mining operation can commence
without obtaining environmental impact assessment in terms of the
notification.”
35. Considering the entire facts of the case and the law discussed
hereinabove, we are of the definite opinion that the respondent Darjeeling
Dooars Plantations (Tea) Ltd. is liable to pay salami which is one of the
conditions of the Rules for the purpose of renewal of lease. The demand
made by the Collector is fully justified. The impugned order passed by the
High Court, therefore, cannot be sustained in law.
Civil Appeal No.2548 of 2006
(State of West Bengal and others vs. Calcutta Mineral Supply Co. Pvt. Ltd.
and another)
36. We have heard Mr. Rakesh Dwivedi, learned senior counsel appearing
for the appellant-State and also Mr. Jaideep Gupta, learned senior counsel
appearing for the respondent-company. In this case, indisputably the
respondent was in possession of the land measuring about 4.54 acres
comprised in a factory or mill together with structures when WBEA Act came
into force in 1954. After the said Act of 1953 came into effect, the
company was allowed to retain all the lands comprised in the factory by the
respondent by reason of Section 6(1)(g) read with Section 6(3) of the Act
as the State Government was of the opinion that the Company required all
the lands for the purpose of the factory. It is also not in dispute that
at all point of time the respondent-company was holding the land of factory
within the ceiling limit as provided under the WBEA Act and West Bengal
Land Reforms Act.
37. Mr. Gupta, learned senior counsel, rightly submitted that after
coming into effect of the aforesaid Act no order was passed by the
concerned authority against the respondent since the land held by it was
well within the ceiling limit. The High Court, while considering the case
of the respondent, came to the following conclusion:
“28. Once the WBLR Act becomes effective and a person becomes a raiyat
within the meaning of Section 4 thereof, he cannot have dual
characteristic, one under the WBEA Act and the other under the WBLR Act. It
is not at the convenience or whims of the State that it will resort to the
provisions of the one or the other Act according to its own convenience.
The law is governed by the statute. There is no scope of arbitrariness or
whims or caprice in the exercise of power or discretion, left with the
State to treat a raiyat in a manner that suits the State according to its
own convenience. It is only Section 14Z, which governs the field and to
which the State can resort to. The whole exercise of the power under the
WBEA Act in this case is wholly without jurisdiction and the exercise can
no more encroach upon the field governed by Section 14Z of the WBLR Act.
28.1. In this case, admittedly, the writ petitioner held land comprised in
mill and factory measuring about 4.54 acres, which is well within the
ceiling both under the WBEA Act and WBLR Act. Therefore, retention of the
land under Section 6(1) could not be subjected to Section 6(3) of the WBEA
Act, which applies in respect of land held in excess of the ceiling.
Similarly, Section 14Z(2) of the WBLR Act applies to land held by a raiyat
in excess of the ceiling. Once the writ petitioner became a raiyat by
virtue of operation of Section 3A read with Section 4 along with the
amendment of the definition of land in Section 2(7) of the WBLR Act with
heritable and transferable right in respect of land held by him within the
ceiling, there is no scope for application of Section 14Z(2) of that Act.
Order:
29. Therefore, the order passed by the Deputy Secretary/Special Secretary
on 20th of July, 2001 (pp. 65-78) upholding the notice and the notice dated
10th of August, 2001 (pp. 76-77) issued by the Sub-Divisional Land and Land
Reforms Officer, Barrackpore, for enquiry and possession pursuant thereto
and the order dated 18th January, 2001 passed by the learned Tribunal
affirming the order passed by the Deputy Secretary being subject-matter of
this writ petition cannot be sustained and are hereby quashed. Let a writ
of certiorari do issue accordingly.”
38. Having regard to the facts of the case of the respondent and also
regard being had to the fact that the respondent at all point of time held
the land within the ceiling limit, the High Court rightly set aside order
dated 29th July, 2011 passed by the Special Secretary upholding the notice
issued by the Sub-Divisional, Land and Land Reforms Officer. Therefore, we
do not find any reason to interfere with the order passed by the High Court
so far this case is concerned.
39. For the reasons aforesaid, Civil Appeal No.2549 of 2006 (Collector,
Jalpaiguri and another vs. Darjeeling Dooars Plantations (Tea) Ltd. and
another) is allowed and the judgment and order passed by the High Court, in
W.P.L.R.T. No.288 of 2005, is set aside. Whereas Civil Appeal No.2548 of
2006 (State of West Bengal and others vs. Calcutta Mineral Supply Co. Pvt.
Ltd. and another) is dismissed. However, there shall be no order as to
costs.
…………………………….J.
(M.Y. Eqbal)
…………………………….J.
(Amitava Roy)
New Delhi
May 06, 2015
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 2548 OF 2006
State of West Bengal and others …..Appellant(s)
versus
Calcutta Mineral Supply Co. Pvt. Ltd.
and another ...Respondent(s)
WITH
CIVIL APPEAL NOs. 2549 OF 2006
Collector, Jalpaiguri and another …..Appellant(s)
versus
Darjeeling Dooars Plantations (Tea) Ltd.
and another ...Respondent(s)
JUDGMENT
M. Y. EQBAL, J.
These appeals by special leave are directed against the common
judgment and order dated 6.10.2005 of the Calcutta High Court, whereby
Division Bench of the High Court allowed the writ petitions preferred by
the respondents herein against the decision of the West Bengal Land Reforms
and Tenancy Tribunal (in short, ‘the Tribunal’) dismissing their original
applications moved against the respective order passed by the Government of
West Bengal resuming the lands held by them.
2. By the impugned judgment, the High Court has disposed of three writ
petitions primarily observing that although the facts are different there
are certain communions of identity within the question to be answered and
certain common principles of law are involved in the writ petitions.
3. In the matter of Calcutta Mineral Supply Co. Pvt. Ltd. (being Civil
Appeal No.2548 of 2006), the respondent-writ petitioner held the land
measuring about 4.54 acres comprised in a factory or mill together with
structures even before the West Bengal Estates Acquisition Act, 1953 (in
short, ‘WBEA Act’) came into force. Factual matrix of this case is that as
a result of notification under Section 4 and effects thereof under Section
5 of the WBEA Act all the land comprised in factory vested in the State.
However, by reason of Section 6(1)(g) read with Section 6(3) of that Act,
the Company was allowed to retain all the lands comprised in factory as the
State Government was of the opinion that the Company required all the lands
for the purpose of the factory.
4. However, in 1996, it came to the notice of the State Government that
the Company had alienated almost half of the land and no land was being
used for the purpose of the factory, which remained closed since 1993. In
exercise of the power conferred on it by the proviso to Section 6(3) of the
Act, the State Government by order dated 2nd April, 1996 revised the order
and resumed 3.76 acres of land as surplus as in the opinion of the State
Government the company did not require the land for the purpose of running
its factory. The Company challenged that order by way of a writ petition,
which stood transmitted to the aforesaid Tribunal and was dismissed.
Aggrieved by the decision of the Tribunal, the Company preferred writ
petition before the High Court. The Division Bench of the High Court set
aside order of the Tribunal holding that order dated 2nd April, 1996 was
not a speaking order and directing the State Government to consider the
matter afresh. Thereafter, Special Secretary of the State Government
passed speaking order directing resumption of the land allowed to be
retained by the respondent-Company. This order was challenged by the
respondents, but the Tribunal dismissed their application.
5. Aggrieved by the decision of the Tribunal, Company again moved the
High Court by way of a writ petition, which was allowed by the Division
Bench of the High Court by the impugned judgment. The High Court quashed
the order of resumption passed by the State Government as also the judgment
of the Tribunal and held that the exercise of power under the WBEA Act in
the instant case was without jurisdiction and that the respondents having
held land within the ceiling limit had acquired the status of raiyat with
heritable and transferable right and cannot be subjected to Section 14-Z of
the West Bengal Land Reforms Act.
6. In the matter of Darjeeling Dooars Plantations (Tea) Ltd. (being
Civil Appeal No.2549 of 2006), the tea estate known as Zurantee Tea Estate
(Zurantee) was leased out by the Government of West Bengal in favour of
Chulsa Tea Company (in short, ‘Chulsa’) being limited for a period of 30
years on 30th January, 1975. In the record of right prepared under the
WBEA Act, the land was recorded to have been permitted to be retained under
Section 6(3) of the WBEA Act. The original lease was granted on 1st April,
1924 and expired before the WBEA Act came into force. In 1976, Chulsa sold
Zurantee to Darjeeling Dooars Plantations (Tea) Ltd. (in short, ‘respondent-
Company’).
7. By an order dated 25th August, 1976, the tea estate was mutated in
favour of respondent-Company. In a Company Petition of 1990, High Court
had allowed a scheme of amalgamation between the respondent-Company, the
transferor, and Karala Valley Tea Co. Ltd. (in short, ‘Karala’), the
transferee, under which Scheme, the name of transferee Karala was changed
to Darjeeling Dooars and all rights, title and interest of Darjeeling
Dooars vested in it. Subsequently by an order dated 18th November, 1991,
the Land Registration Collector allowed mutation of the name in respect of
Zurantee in favour of Darjeeling Dooars.
8. The Government of West Bengal issued a notification on 1st June, 1994
amending Schedule ‘F’ of the WBEA Rules inserting Clause 1A and 1B to be
incorporated in the lease requiring payment of salami of Rs.15,000/- per
hectare of land leased out before further renewal of the lease in cases
renewal was asked for by a transferee allowing the transferee to enjoy the
balance period of the lease transferred. The respondent-Company applied
for the renewal of lease of the Zurantee for a period of 30 years on 10th
March, 1998 and a deed renewing the lease was executed on 12th March, 1998
in favour of the respondent-Company. In March, 2002, the Collector demanded
a sum of Rs.1,10,50,200/- as salami in respect of renewal of the said lease
pursuant to the amended clause, which was challenged by the respondent-
Company before the Tribunal. Upon the matter being remanded by the
Tribunal, the Collector again held that the respondent-Company was liable
to pay salami and directed the Company to deposit the same. The respondent-
Company again moved before the Tribunal by way of an application, which was
dismissed. The Tribunal upheld the notification imposing salami on
transfer of tea estate. Aggrieved by the order, the respondent-Company
moved the High Court by way of writ petition, which was allowed by the
Division Bench of the High Court by the impugned judgment. Holding that
the respondent-Company was entitled to renewal of the lease without payment
of salami, the High Court quashed the order of the Tribunal as well as the
order of the Collector and the letter of demand.
9. Hence, these two appeals by special leave have been preferred by the
State Government and its functionaries under Article 136 of the
Constitution.
10. Now we shall discuss the facts and law applicable thereto separately
for better appreciation of the case of the parties.
Civil Appeal No.2549 of 2006
(Collector, Jalpaiguri and another vs. Darjeeling Dooars Plantations
(Tea) Ltd. and another)
11. Admittedly in the year 1924, the appellant granted a lease of the
property for a period of 30 years, which expired in 1954. The respondent
continued in possession till 1974 when a fresh lease deed was executed on
30.1.1975 in favour of Chulsa Tea Company Limited in respect of Zurantee
Garden. The lease was made effective from 25.3.1968. Some of the terms
and conditions of the lease which are relevant in the present case, are as
under:
“(4)(a) That the Lessee/Lessees shall at all times observe and conform to
the relevant provisions of the West Bengal Estates Acquisition Rules for
the time being in force.
(b) That in respect of land comprised in a forest the Lessee/Lessees
shall be subject to the control and supervision of the State Government.
xxxxxxxx
(13) (a) That the Lessee shall not transfer, whether in full or in part, or
club or amalgamate tea-gardens without the formal sanction of the
Collector;
Provided that except in cases where the provisions of the West Bengal
Alienation of Land (Regulation) Act, 1960 (West Bengal Act XVI of 1960),
apply, no such sanction shall be necessary for equitable mortgage of a tea-
garden with a Scheduled Bank by the deposit of title deeds. All such
equitable mortgages shall, however, be referred to the Collector
immediately.
(b) That the lease-hold interest shall be heritable.
(c) That in the case of a transfer of such lease-hold interest, whether
in full or in part, the same shall be subject to the provision of any law
for the time being in force and applicable thereto and also subject to
prior consent of the Collector.
xxxxxxxx
(16) (a) That the Lessee/Lessees shall be entitled to the renewal of the
lease for a further period of thirty years and to successive renewals for
similar periods, subject to the rules and the terms and conditions of this
lease and the such other terms and conditions as the State Government may
from time to time consider it necessary to impose and include in such
renewed lease or leases and subject further to such rent as may then be
fixed, provided that such additional terms and conditions shall not be
inconsistent with the law regulating such lease and shall not have
retrospective effect.”
12. From the aforementioned terms and conditions contained in the lease
deed of 1975, it is clear that the respondent lessee shall observe and
conform to the relevant provisions of the West Bengal Estates Acquisition
Rules for the time being in force. Clause 13(a) further provides that the
lessee shall not transfer without the formal sanction of the Collector and
Clause 13(c) provides that the transfer shall be subject to any law for the
time being in force and also subject to prior consent of the Collector.
13. Clause 16(a) of the lease deed contains a renewal clause according to
which the lessee shall be entitled to the renewal of the lease for a
further period of thirty years and to successive renewals for similar
periods, subject to the rules and the terms and conditions of this lease
and also such other terms and conditions as the State Government may from
time to time consider it necessary to impose and include in such renewed
lease or leases and subject further to such rent as may then be fixed.
However, such additional terms and conditions shall not be inconsistent
with the law regulating such lease and shall not have retrospective effect.
14. Indisputably, during the subsistence of the lease, the respondent
Darjeeling Dooars Plantations (Tea) Ltd. and the Karala Valley Tea Company
were amalgamated and all the properties, rights and interest stood
transferred to the respondent Darjeeling Dooars Plantations (Tea) Ltd. by
the order passed by the Calcutta High Court on 31.10.1990 in a Company
petition. It is also not in dispute that the name of the respondent
Darjeeling Dooars Plantations (Tea) Ltd. was mutated by the order of the
Collector dated 28.11.1991.
15. Originally the lease was granted in the year 1924 for a period of 30
years. Before the expiry of the period of lease, the West Bengal Estates
Acquisition Act, 1953 came into force in the State of West Bengal.
According to Section 4 of the Act, all estates and the rights of every
intermediary in each such estate stood vested in the State free from all
encumbrances with effect from the date of notification time to time issued
by the State Government. Section 5 of the said Act deals with the effect
of the notification. Section 6 of the said Act lays down the provisions
with regard to right of intermediary to retain certain lands. Section 6
reads as under:
“6. (1) Notwithstanding anything contained in sections 4 and 5, an
intermediary shall, except in the cases mentioned in the proviso to sub-
section (2) but subject to the other provisions of that sub-section, be
entitled to retain with effect from the date of vesting—
(a) xxxxxxxxxx
(b) xxxxxxxxxx
(c) xxxxxxxxxx
(d) xxxxxxxxxx
(e) xxxxxxxxxx
(f) subject to the provisions of sub-section (3), land comprised in tea
gardens or orchards or land used for the purpose of livestock breeding,
poultry farming or dairy;
(g) xxxxxxxxxx
xxxxxxxxxx
(2) An intermediary who is entitled to retain possession of any land under
sub-section (1) shall be deemed to hold such land directly under the State
from the date of vesting as a tenant, subject to such terms and conditions
as may be prescribed and subject to payment of such rent as may be
determined under the provisions of this Act and as entered in the record-of-
rights finally published under Chapter V except that no rent shall be
payable for land referred to in clause (h) or (i) :
Provided that if any tank fishery or any land comprised in a tea-garden,
orchard, mill, factory or workshop was held immediately before the date of
vesting under a lease, such lease shall be deemed to have been given by the
state Government on the same terms and conditions as immediately before
such date subject to such modification therein as the State Government may
think fit to make.
(3) In the case of land comprised in a tea-garden, mill, factory or
workshop the intermediary, or where the land is held under a lease, the
lessee, shall be entitled to retain only so much of such land as, in the
opinion of the State Government, is required for the tea-garden, mill
factory or workshop, as the case may be, and a person holding under to be
an intermediary:
Provided that the State Government may, if it thinks fit so to do after
reviewing the circumstances of a case and after giving the intermediary or
the lessee, as the case may be, an opportunity of being heard, revise any
order made by it under this sub-section specifying the land which the
intermediary or the lessee shall be entitled to retain as being required by
him for the tea-garden, mill, factory or workshop, as the case may be.
Explanation:—The expression “land held under a lease” includes any land
held directly under the State under a lease.
Exception:-In the case of land allowed to be retained by an intermediary or
lessee in respect of a tea-garden, such land may include any land comprised
in a forest if, in the opinion of the State Government, the land comprised
in a forest is required for the tea-garden.”
16. Reading relevant provisions of Section 6, it is manifest that an
intermediary, in possession of the land including tea garden, shall be
entitled to retain subject to the provisions contained in sub-section (3)
of Section 6 of the said Act. Sub-section 3 very clearly provides that the
lessee in possession of tea garden etc. shall continue and shall be deemed
to be an intermediary.
17. Section 59 of the WBEA Act empowers the State Government to frame
rules for carrying out the purpose of the Act. Section 59 of the Act reads
as under:
“Section 59 - Power to make rules
(1) The State Government may, after previous publication, make rules for
carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing
power, such rules may provide for all or any of the matters which, under
any provision of this Act, are required to be prescribed or to be provided
for by rules.”
18. In exercise of the power conferred by Section 59 of the Act, the West
Bengal Estates Acquisition Rules, 1954 was framed and the same was
published in the official Gazette vide Notification dated 28.5.1954. Rule
4 of the said Rules inter alia provides that the land retained by an
intermediary under the provisions of sub-section (1) of Section 6 shall be
held by him from the date of vesting on the terms and conditions specified
in the Rules. So far as the tea garden is concerned, it has been
specifically provided that an intermediary shall hold such land on the
terms and conditions set out in Schedule F appended to the Rules.
Therefore, for better appreciation, Schedule F and the Form-1 for the
purpose of granting lease for tea garden have been reproduced here.
“SCHEDULE F
[Rule 4]
Land comprised in a tea garden retained by an intermediary under sub-
section (1), read with sub-section (3), of section 6 shall be deemed to be
held directly under the State from the date of vesting as a tenant [until a
lease is granted in Form I appended to this schedule, on such terms and
conditions as may be specified by the Collector in a summary settlement,
and thereafter, on a lease being granted in Form I appended to this
schedule, on the terms and conditions specified in such lease]. There
shall be a lease in Form I in respect of each such intermediary, and the
same shall be registered and numbered in the office of the Collector.
1A xxxxxxxxxxxxxxxxxxxx
1B xxxxxxxxxxxxxxxxxxxx
The first lease shall be given from the date of the order under sub-section
(3) of section 6 or from the date of the determination of the rent under
section 42, whichever is later.”
19. By Notification dated 1.6.1994 issued by the Government of West
Bengal, Land & Land Reforms Department, an amendment has been brought in
Schedule F to the said Rules discussed hereinabove. By the said
notification, two sub-paragraphs being 1A and 1B were inserted, which are
reproduced hereunder:
“1A. When the lease of a tea garden is determined and the tea garden is
leased afresh to a new lessee, the later shall be liable to pay salami at
the rate of Rs.15,000/- per hectare of the land leased out.
1B. In case of a transfer of the leasehold interest, except by way of
inheritance, the transferee shall not be liable to pay salami during the
unexpired period of the lease. On the expiry of the transferred lease, he
shall be liable to pay salami at the rate of Rs.15,000/- per hectare of the
land leased out before the lease is further renewed.”
20. In Clause (13), sub-clause (dd) was also inserted, which is quoted
hereinbelow:
“(dd) That the transferee, other than by inheritance, shall be required to
enter into a fresh lease on payment of salami at the rate laid down in
paragraph 1B of Schedule F within three months of expiry of the unexpired
period of lease.”
21. It is therefore manifest that when a lease of the tea garden is
determined by efflux of time and a lease is granted afresh to new lessee,
the latter shall be liable to pay salami at the rate of Rs.15,000/- per
hectare of the land leased out. Clause 1B also provides that the
transferee shall not be liable to pay salami during the unexpired period,
but on the expiry of the lease, he shall be liable to pay salami at the
rate of Rs.15,000/- per hectare of the land leased out before the lease is
further renewed.
22. Admittedly, the lease of 1975, which became effective from 1968, got
expired in the year 1998. The respondent then approached the Government
for renewal of the lease. The Collector prepared a lease deed
incorporating the terms and conditions contained in the earlier lease and
referred it to the Government for final approval. The request of the
respondent for grant of lease was considered by the Government and by order
as contained in letter dated 5.10.2001, addressed to the District
Magistrate & Collector, Jalpaiguri, informed that the Government will
accord post facto approval to the renewal of the lease for a further period
of 30 years on payment of salami of Rs.15,000/- per hectare. The letter
dated 5.10.2001 is reproduced hereunder:
“Government of West Bengal
Land and Land Revenue Department
Land Reforms Branch
L.R. Bench
No.4051-LR/3T-69/04
Dated, Kolkata, the 5th October, 2001
From: The Deputy Secretary to the Govt. of West Bengal
To: The District Magistrate & Collector, Jalpaiguri, P.O. & Dist.
Jalpaiguri.
Sub: Proposal for post-factor approval to the renewal of lease of the land
comprised in Zurantee Tea Garden in Jalpaiguri District.
The undersigned is directed to refer to the above subject and to say
that post-facto approval to the renewal of lease of the land comprised in
Zurantee Tea Garden for the period of 30 years in favour of M/s. Darjeeling
Dooars Plantation (Tea) Limited will be accorded after salami @ Rs.15,000/-
per hectare and other dues, if any, are realized from the concerned
Company. Till such post-facto approval is accorded, renewal accorded by
him will remain inoperative.
He is, therefore, requested to realize all the dues and report
compliance thereof to the Department with the certificate that there is no
arrear dues from the concerned companies so as to enable the Govt. in the
Land & Land Reforms Department to accord necessary post-facto approval as
so proposed by him.
He is also requested to furnish the copy of relevant documents particularly
the copy of the High Court’s order and copy of certificate of incorporation
issued by the Registrar of Companies based on which Mutation case no. IV-5
of 1991-92 was finalized and mutation was allowed.
Sd/-
Deputy Secretary to the Govt. of West Bengal”
23. In pursuance to the decision taken by the State Government, an order
was passed by the Collector, Jalpaiguri dated 29.11.2002 directing the
respondent to deposit Rs.15,000/- per hectare as salami at the time of
renewal before according approval of the Land & Land Revenue Department.
The order was communicated to the respondent and the same came to be
challenged before the Land Reforms and Tenancy Tribunal. The respondent
sought a declaration that the Notification dated 1.6.1994 and amendments of
the Rules in Schedule F and Form 1 thereto are illegal and
unconstitutional. The said application was rejected by the Tribunal.
However, by the impugned order, the High Court allowed the writ petition
and quashed the order of the Tribunal.
24. We have heard Mr. Rakesh Dwivedi, learned senior counsel appearing
for the appellant-State and Mr. A.K. Ganguli, learned senior counsel
appearing for the respondent-Company in Civil Appeal No.2549 of 2006.
25. Mr. Dwivedi assailed the order of the High Court as being contrary to
the facts of the case and mis-appreciating the status of the respondent by
recognizing it as a lessee and not as a transferee. Mr. Dwivedi submitted
that Clause 1A and 1B, as inserted by the amendment, will apply on its own
course as even the inclusion of these clauses in the lease deed is not
necessary. According to the learned counsel, Clause 16(a) was already
there in the previous lease and as per the said clause additional
conditions to the subsequent lease can be included. Mr. Dwivedi submitted
that post facto sanction by the State Government is a pre-condition for
payment of salami and for that reason the lease deed executed by the
respondent was signed by the Collector and forwarded to the State
Government for sanction. According to Mr. Dwivedi, renewal of lease is a
fresh one and lessor, namely the State, is entitled to include additional
terms and conditions in the said document of lease.
26. Mr. A.K. Ganguli, learned senior counsel appearing for the
respondent, on the other hand contended that the lease granted to the
predecessor-in-interest of the respondent is statutory lease governed by
the Act and the Rules made thereunder and unless and until the amendments
brought in by the notification dated 1.6.1994 and incorporated in Form 1,
salami cannot be realised. According to the learned counsel, the
respondent-Company came into existence much before the transfer of the
leasehold interest, by virtue of amalgamation and the order passed by the
High Court in the Company Petition. According to Mr. Ganguli, the
respondent is in the nature of joint venture Company. Learned senior
counsel relied upon decision of this Court in the case of New Horizons Ltd.
vs. Union of India (1995) 1 SCC 478 and in the case of State of U.P. vs.
Lalji Tandon, (2004) 1 SCC 1.
27. Perusal of the impugned order passed by the High Court would show
that although the High Court took notice of clause 16(a) of the lease deed
and amendment brought in the Schedule F and Form 1 of the Rules it came to
the following conclusion:
“22.1. These terms of renewal are clear and unambiguous and these are terms
exactly, which is provided in Schedule "F" Form-I of the WBEA Rules. In
terms of the conditions contained in Clause 16(a), the State
Government/lessor was entitled to incorporate additional terms and
conditions consistent with the law regulating the lease with prospective
effect in the renewed lease. This lease was granted in terms of Rule 4 of
the WBEA Rules in terms of Schedule "F" in Form-I. The State is entitled
only to incorporate additional conditions in the renewed lease with
prospective effect. Therefore, the amendment, if any, incorporated in
Schedule "F" by reason of the amendment effective from 1st of June, 1994
would not be effective in respect of unexpired period of the lease to which
the Darjeeling Dooars had stepped into. Therefore, under Clause 16(a) read
with Schedule "F", Darjeeling Dooars was entitled to renewal of the lease
on the same terms and conditions. The amendment brought about could not be
given retrospective effect to affect the right of the lessee/transferee
stepping into the shoes of the transferor-lessee to obtain further renewal
of the lease for further period of 30 years and to successive renewals for
similar periods. The only liberty the State Government had under the said
clause is that it can impose and include in the said renewed lease
additional terms and conditions not inconsistent with Rule 4 Schedule "F"
and Form-I of the WBEA Rules without retrospective effect.
22.2. Therefore, the amendment brought about in Schedule "F" could be
incorporated in the renewed lease and was so rightly incorporated in the
1998 lease. As such the conditions so incorporated became part of the
renewed lease and would govern the terms and conditions of the renewed
lease and that too prospectively. These additional terms and conditions
incorporated in the renewed lease became effective after the lease was
renewed, namely when the right to renew the lease was exercised and upon
such exercise the right came to an end and the renewal of the lease being a
fresh lease, these terms cannot operate to affect a situation prior to the
renewal of the lease. In terms of these additional conditions, the salami
is payable in consideration of the renewal after the expiry of the renewed
lease containing the terms. A term, which was not in existence in the lease
sought to be renewed within the scope of Clause 16(a), could not govern the
right of the lessee to obtain renewal of the right or the State to impose
conditions for renewal on the basis of Clause 16(a) of the 1975 lease, as
was held in Delhi Development Authority v. Durga Chand Kaushish [1974] 1
SCR 535 .
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22.4. The amendment also does not provide that the amended clauses would
have retrospective operation. In any event, the terms of the lease cannot
be substituted even by legislation. No vested right, particularly, in
respect of fiscal or revenue matters already accrued could be taken away
through legislation; neither any legislation in that respect could be
retrospective in operation.
Conclusion:
23. In these circumstances, the additional terms contained in the renewed
lease would be effective at the time of renewal of the renewed lease
entitling the State of demand salami in terms of Clause 1B from the
transferee if there is any transfer. However, salami can be demanded by the
State under Clause 1A upon determination of the lease from the person to
whom the fresh lease is granted after the 1994 Amendment of the WBEA Rules
even if Clause 1A was not incorporated in the lease determined.
23.1. In these circumstances, the Government is not entitled to demand
salami in terms of Clauses 1A or 1B incorporated in the renewed lease as a
consideration for the 1998 renewal from the Darjeeling Dooars. Such a
demand is inconsistent with the law regulating such lease and cannot be
retrospective in effect.”
28. We have given our anxious consideration to the reasoning assigned by
the High Court while arriving at such conclusion. In our view, the High
Court has misconstrued and misinterpreted the relevant provisions contained
in the Rules viz-a-viz the condition of renewal as contained in clause
16(a) of the lease deed. The High Court has committed error of law in
holding that the amendment brought about could not be given retrospective
effect to affect the right of the lessee/transferee stepping into the shoes
of the transferee/lessee to obtain further renewal of lease for a further
period of 30 years and to successive renewals for similar periods. The
High Court is not correct in law in holding that the amended clause would
have retrospective operation.
29. Indisputably, the renewal of lease is a fresh grant where the
principal lease executed between the parties containing a clause that the
lease shall have to be renewed by giving a fresh grant in accordance with
the said clause. In the instant case, as per clause 16(a) of the earlier
lease deed, the lease is to be renewed for a further period of 30 years but
subject to the rules and the terms and conditions of the lease and also
such other terms and conditions as the State Government may from time to
time consider it necessary to impose and include in such renewed lease.
Clause 16(a) further provides that additional terms and conditions that may
be considered necessary by the State Government be included but the same
shall not be inconsistent with the law renewing such lease and shall not
have retrospective effect.
30. As noticed above, the State Government by notification dated 1.6.1994
brought amendment in the Rules by incorporating two more conditions i.e.
paragraph 1A and 1B. As per the additional condition, in case of fresh
lease granted by the State in respect of tea garden, the lessee shall be
liable to pay salami at the rate of Rs. 15,000/- per hectare of the land
leased out. However, paragraph 1-B made it clear that in case of transfer
of leasehold interest, the transferee shall not be liable to pay salami
during the unexpired period of lease, but after the expiry of the existing
period of lease the transferee shall be liable to pay salami at the rate of
Rs. 15,000/- per hectare before the lease is further renewed.
31. Admittedly, before the expiry of the lease in question in 1998, the
respondent/transferee stepped into the shoes of the original lessee in the
year 1990. In 1994, by notification dated 1.6.1994, an amendment was
brought in Schedule F of the Rules, as discussed hereinabove, in terms of
clause I-B. Therefore, the respondent shall not be liable to pay salami
during the unexpired period of lease up to 1998. The State Government has
rightly not made any claim for salami for the unexpired period of lease,
but for the fresh renewal of lease after 1998 which is a fresh grant. The
demand of salami by State Government for according sanction for renewal of
lease cannot and shall not by any stretch of imagination be held to be
retrospective.
32. In the case of State of U.P. vs. Lalji Tandon, (2004) 1 SCC 1, this
Court while considering the renewal clause in the lease deed observed:-
“13. In India, a lease may be in perpetuity. Neither the Transfer of
Property Act nor the general law abhors a lease in perpetuity. (Mulla on
the Transfer of Property Act, 9th Edn., 1999, p. 1011.) Where a covenant
for renewal exists, its exercise is, of course, a unilateral act of the
lessee, and the consent of the lessor is unnecessary. (Baker v. Merckel,
also Mulla, ibid., p.1204.) Where the principal lease executed between the
parties containing a covenant for renewal, is renewed in accordance with
the said covenant, whether the renewed lease shall also contain similar
clause for renewal depends on the facts and circumstances of each case,
regard being had to the intention of the parties as displayed in the
original covenant for renewal and the surrounding circumstances. There is a
difference between an extension of lease in accordance with the covenant in
that regard contained in the principal lease and renewal of lease, again in
accordance with the covenant for renewal contained in the original lease.
In the case of extension it is not necessary to have a fresh deed of lease
executed, as the extension of lease for the term agreed upon shall be a
necessary consequence of the clause for extension. However, option for
renewal consistently with the covenant for renewal has to be exercised
consistently with the terms thereof and, if exercised, a fresh deed of
lease shall have to be executed between the parties. Failing the execution
of a fresh deed of lease, another lease for a fixed term shall not come
into existence though the principal lease in spite of the expiry [pic]of
the term thereof may continue by holding over for year by year or month by
month, as the case may be.”
33. In the case of Gajraj Singh & ors. vs. State Transport Appellate
Tribunal & ors., (1997) 1 SCC 650, this Court while considering the term
renewal of lease or licence contained in document, observed that “grant of
renewal is a fresh grant though it breathes life into the operation of the
previous lease or licence granted as per existing appropriate provisions of
the Act, rules or orders or acts intra vires or as per the law in operation
as on the date of renewal”.
34. In the case of M.C. Mehta vs. Union of India & ors., (2004) 12 SCC
118, a Division Bench of this Court was considering the question as to the
effect of notification in such case where the lessee claims renewal of
mining lease. Some of the leases were granted for extraction of minerals.
In the mean time, the notification dated 27.1.1994 was issued by Ministry
of Environment and Forest, Government of India in exercise of power
conferred by Environment (Protection) Act, 1986 putting a restriction to
the grant of mining lease without the clearance of the State Government in
accordance with the procedure specified in the notification. Rejecting the
contention made by the lessee this Court observed:-
“77. We are unable to accept the contention that the notification dated 27-
1-1994 would not apply to leases which come up for consideration for
renewal after issue of the notification. The notification mandates that the
mining operation shall not be undertaken in any part of India unless
environmental clearance by the Central Government has been accorded. The
clearance under the notification is valid for a period of five years. In
none of the leases the requirements of the notification were complied with
either at the stage of initial grant of the mining lease or at the stage of
renewal. Some of the leases were fresh leases granted after issue of the
notification. Some were cases of renewal. No mining operation can commence
without obtaining environmental impact assessment in terms of the
notification.”
35. Considering the entire facts of the case and the law discussed
hereinabove, we are of the definite opinion that the respondent Darjeeling
Dooars Plantations (Tea) Ltd. is liable to pay salami which is one of the
conditions of the Rules for the purpose of renewal of lease. The demand
made by the Collector is fully justified. The impugned order passed by the
High Court, therefore, cannot be sustained in law.
Civil Appeal No.2548 of 2006
(State of West Bengal and others vs. Calcutta Mineral Supply Co. Pvt. Ltd.
and another)
36. We have heard Mr. Rakesh Dwivedi, learned senior counsel appearing
for the appellant-State and also Mr. Jaideep Gupta, learned senior counsel
appearing for the respondent-company. In this case, indisputably the
respondent was in possession of the land measuring about 4.54 acres
comprised in a factory or mill together with structures when WBEA Act came
into force in 1954. After the said Act of 1953 came into effect, the
company was allowed to retain all the lands comprised in the factory by the
respondent by reason of Section 6(1)(g) read with Section 6(3) of the Act
as the State Government was of the opinion that the Company required all
the lands for the purpose of the factory. It is also not in dispute that
at all point of time the respondent-company was holding the land of factory
within the ceiling limit as provided under the WBEA Act and West Bengal
Land Reforms Act.
37. Mr. Gupta, learned senior counsel, rightly submitted that after
coming into effect of the aforesaid Act no order was passed by the
concerned authority against the respondent since the land held by it was
well within the ceiling limit. The High Court, while considering the case
of the respondent, came to the following conclusion:
“28. Once the WBLR Act becomes effective and a person becomes a raiyat
within the meaning of Section 4 thereof, he cannot have dual
characteristic, one under the WBEA Act and the other under the WBLR Act. It
is not at the convenience or whims of the State that it will resort to the
provisions of the one or the other Act according to its own convenience.
The law is governed by the statute. There is no scope of arbitrariness or
whims or caprice in the exercise of power or discretion, left with the
State to treat a raiyat in a manner that suits the State according to its
own convenience. It is only Section 14Z, which governs the field and to
which the State can resort to. The whole exercise of the power under the
WBEA Act in this case is wholly without jurisdiction and the exercise can
no more encroach upon the field governed by Section 14Z of the WBLR Act.
28.1. In this case, admittedly, the writ petitioner held land comprised in
mill and factory measuring about 4.54 acres, which is well within the
ceiling both under the WBEA Act and WBLR Act. Therefore, retention of the
land under Section 6(1) could not be subjected to Section 6(3) of the WBEA
Act, which applies in respect of land held in excess of the ceiling.
Similarly, Section 14Z(2) of the WBLR Act applies to land held by a raiyat
in excess of the ceiling. Once the writ petitioner became a raiyat by
virtue of operation of Section 3A read with Section 4 along with the
amendment of the definition of land in Section 2(7) of the WBLR Act with
heritable and transferable right in respect of land held by him within the
ceiling, there is no scope for application of Section 14Z(2) of that Act.
Order:
29. Therefore, the order passed by the Deputy Secretary/Special Secretary
on 20th of July, 2001 (pp. 65-78) upholding the notice and the notice dated
10th of August, 2001 (pp. 76-77) issued by the Sub-Divisional Land and Land
Reforms Officer, Barrackpore, for enquiry and possession pursuant thereto
and the order dated 18th January, 2001 passed by the learned Tribunal
affirming the order passed by the Deputy Secretary being subject-matter of
this writ petition cannot be sustained and are hereby quashed. Let a writ
of certiorari do issue accordingly.”
38. Having regard to the facts of the case of the respondent and also
regard being had to the fact that the respondent at all point of time held
the land within the ceiling limit, the High Court rightly set aside order
dated 29th July, 2011 passed by the Special Secretary upholding the notice
issued by the Sub-Divisional, Land and Land Reforms Officer. Therefore, we
do not find any reason to interfere with the order passed by the High Court
so far this case is concerned.
39. For the reasons aforesaid, Civil Appeal No.2549 of 2006 (Collector,
Jalpaiguri and another vs. Darjeeling Dooars Plantations (Tea) Ltd. and
another) is allowed and the judgment and order passed by the High Court, in
W.P.L.R.T. No.288 of 2005, is set aside. Whereas Civil Appeal No.2548 of
2006 (State of West Bengal and others vs. Calcutta Mineral Supply Co. Pvt.
Ltd. and another) is dismissed. However, there shall be no order as to
costs.
…………………………….J.
(M.Y. Eqbal)
…………………………….J.
(Amitava Roy)
New Delhi
May 06, 2015
