NON REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.10181 OF 2011
(arising out of SLP (C) No.13585 of 2011)
Smt. Khela Banerjee and another …
Appellants
versus
City Montessori School and others … Respondents
with
CIVIL APPEAL NO. 10180 OF 2011
(arising out of SLP (C) No.22369 of 2011)
J U D G M E N T
G. S. Singhvi, J.
1. The main question which arises for consideration in these appeals is
whether, having rejected its prayer for issue of a mandamus to Lucknow
Development Authority (LDA) to accept the total amount of sale
consideration with regard to plot No.92A/C (Khasra No. 754), Mahanagar,
Lucknow, the High Court could have relied upon the provisions of the
Right of Children to Free and Compulsory Education Act, 2009 (for short,
‘the 2009 Act’) and granted relief to City Montessori School (respondent
No.1 in Civil Appeal No.10181 of 2011 and the appellant in Civil Appeal
No.10180 of 2011) in substantially similar terms. An ancillary question
which needs determination is whether the High Court had rightly quashed
the action taken by LDA and Nazul Officer, Lucknow in compliance of order
dated 4.5.2009 passed in Writ Petition No.4085/2009.
2. For the sake of convenience, the parties shall hereinafter be
referred to as the appellants and respondent No.1.
Background facts and details of the cases filed by the parties
3.1. The Nazul Officer leased out plot No.92A, Mahanagar, Faizabad Road,
Lucknow to Shri Moni Mohan Banerjee (hereinafter described as ‘Shri
Banerjee’) in 1958 for a period of 30 years with a right to seek two
renewals of 30 years each. The terms of the lease were incorporated in the
registered deed executed on 14.2.1959.
3.2. After about 3 years, the Nazul Officer granted lease of the adjoining
plot bearing No. 92 A/C to Shri Banerjee for a period of 7 years commencing
from 1.8.1961 for garden purposes. The registered lease deed dated
29.1.1964 executed between the Governor of Uttar Pradesh through the Nazul
Officer and Shri Banerjee contained a stipulation that at the end of 7
years period, the lessee shall hand over possession of the plot to the
Government. However, Shri Banerjee did not surrender the plot on or after
31.7.1968 and continued to occupy the same till January, 1996.
3.3. In 1992, the Government of Uttar Pradesh took a policy decision for
conversion of leasehold Nazul lands into freehold and disposal thereof.
This policy was circulated vide G.O. dated 23.5.1992 and was subsequently
modified vide G.O. dated 2.12.1992 and G.O. dated 3.10.1994, paragraph 4
whereof postulated conversion of open Nazul land declared surplus under the
Ceiling Act and horticulture/agriculture lease land into freehold and
disposal thereof by auction or by inviting tenders.
3.4. In furtherance of the policy contained in G.O. dated 3.10.1994, LDA
issued tender notice dated 24.11.1994 and invited bids for disposal of
plots (open Nazul land which had been converted into freehold). However,
before the bids received pursuant to notice dated 24.11.1994 could be
accepted, the State Government changed the nature of some of the plots from
residential to commercial. Therefore, LDA cancelled tender notice dated
24.11.1994 and invited fresh bids for eight plots including plot No.92A/C.
3.5. Shri Banerjee, who was illegally occupying plot No.92-A/C filed Suit
No.285 of 1994 in the Court of Civil Judge, Lucknow with the prayer that
G.Os. dated 2.12.1992 and 3.10.1994 may be quashed and LDA be restrained
from dispossessing him pursuant to tender notice dated 24.11.1994.
3.6. Respondent No.1 filed Writ Petition No.11 of 1995 for quashing tender
notice dated 20.12.1994 on the ground that the same was contrary to the
Zonal Development Plan prepared under the U.P. Urban Planning and
Development Act, 1973 and prayed that a mandamus be issued to the official
respondents to accept the tenders submitted pursuant to notice dated
24.11.1994 and complete the formalities for the execution of the sale deed.
Respondent No.1 also applied for stay but could not convince the High
Court to entertain its prayer.
3.7. Faced with the possibility of losing an opportunity to get the plots
in respect of which tenders were invited vide notice dated 20.12.1994,
respondent No.1 submitted bids for four plots including plot No.92 A/C.
The competent authority accepted the bids of respondent No.1. The latter
deposited 25% of the bid money, i.e., Rs.7,40,700/- but did not pay the
balance amount within the stipulated period despite notices dated 21.2.1995
and 8.3.1995 issued by LDA. Instead, Shri Jagdish Gandhi, Manager of
respondent No.1 made representation for early delivery of possession of the
plots and grant of permission to pay 3/4th of the price in six-monthly
installments in accordance with G.O. dated 3.10.1994. LDA did not accept
the request of Shri Jagdish Gandhi by observing that the facility of paying
the price of plots in six-monthly installments is not available in the
cases involving disposal of open Nazul land and garden leases. Shri
Jagdish Gandhi then approached the Principal Secretary to the Governor and
succeeded in persuading him to send letter dated 3.4.1995 to the State
Government to instruct the officers of LDA to hand over possession of the
plots and accept the balance amount in easy installments. The State
Government forwarded that letter to LDA, which declined to accept the
request made by Shri Jagdish Gandhi on the ground that the advertisement
did not contain any such stipulation. Simultaneously, a decision was taken
to cancel the bids and this was conveyed to respondent No.1 vide letter
dated 14.6.1995.
3.8. Respondent No.1 did not challenge cancellation of the bids because
its Manager was sure that he will be able to pull strings in the power
corridors and get the desired relief. This is evinced from the fact that
the representation made by him was accepted by none else than the Governor
of the State, who passed order dated 17.12.1995 and directed that
possession of the plots be handed over to the management of respondent No.1
and the balance amount be accepted in ten six-monthly installments with
interest which may be fixed keeping in view the rates charged for the
schemes framed by the Development Authority.
3.9. In furtherance of the direction given by the Governor, the State
Government sent letter dated 12.1.1996 to the Vice-Chairman of LDA, which
reads as under:
“No.48/9-Aa-4-96-39N/91
From:
Shri Rakesh Kumar Goyal,
Joint Secretary,
Government of Uttar Pradesh
To
The Vice Chairman,
Lucknow Development Authority,
Lucknow
Govt. Section-4 Lucknow dated 12Ih January, 1996
Subject: Regarding handing over possession of Nazul Land comprised in
Khasra no.91-A-B-754, 92-A-C-754, 10-A-758, 90-A-A-754 allotted
to the City Montessori School, Lucknow through tender
Sir,
Please refer to your Letter No.425/NS dated 9th January,
1996 on the above subject.
In this regard I have been directed to state to you that
all the above four plots of land which have been approved in
favour of Manager, Shri Jagdish Gandhi, City Montessori School
and which was cancelled vide Government Order dated 14lh June,
1995, after careful consideration in the matter the Government
has decided that with reference to all the above four plots of
land if Shri Jagdish Gandhi has deposited 25% amount and if
there is no stay order against him, its possession be handed
over to Shri Jagdish Gandhi and balance 75% amount be realised
in future 10 six monthly instalments and interest payable
thereon shall be informed subsequently.
Sd/-
(Rakesh Kumar Goel)
Joint Secretary”
3.10. On the same day, an agreement was executed between the Vice-
Chairman of LDA acting on behalf of the Governor of Uttar Pradesh and
respondent No.1 through its Manager Shri Jagdish Gandhi. The relevant
portions of the agreement (as contained in the paper book of Civil Appeal
No.10180 of 2011) are reproduced below:
“DEED OF AGREEMENT
This Deed of Agreement is executed between the Vice-Chairman,
Lucknow Development Authority, on behalf of H.E. the Governor of
the State of Uttar Pradesh, hereinafter referred to as the
Vendor, meaning thereby its representatives, assigns and legal
representatives (The First Party)
AND
City Montessori School, Station Road, Lucknow through its
Manager, Shri Jagdish Gandhi, aged about 60 years son of late
Sh. Phoolchand Agrawal resident of 12, Station Road, hereinafter
referred to as the Purchaser, meaning thereby the Purchaser, its
heirs, legal heirs and assigns (The Second Party).
Whereas as per the directions contained in the Government Order
No. 48/9-Aa-4-96-39N/91, dated 12.1.1996, issued with regard to
management and disposal of Nazul land, a Nazul Land Khasra No.
92-A/C 754, area 7305 sq. ft. situated at Mahanagar Faizabad
Road, Lucknow was disposed of for commercial purpose by way of
free-hold tender/auction. In response to the above auction, by
this office letter No. 71 N.S., dated 20.5.96 an amount of
Rs.22,21,300.00 was required to be deposited. You deposited
Rs.7,40,000.00 by bank drafts in Nazul Fund, details of which
are given below. Challan No. BDN-8070443 dated 7.1.95 - Rs.
25,000.00, BDN-8070445 dated 7.1.95 Rs.2,71,200.00 BDN-8069790
dated 13.12.95 Rs.1,80,000.00, BDN-136509 dated 2.2.95
Rs.2,64,500.00 - Total Rs.7,40,700.00, which means that 25% of
the total auction amount has been deposited. The Second Party
sought permission to deposit rest 75% amount in installments,
which the Government has granted by Government Order No. 48/9-Aa-
4-96-39L/91 dated 12.1.1996 to deposit 75% amount in further ten
half yearly installments from the date of delivery of
possession. Information of rate of interest on the above 75%
amount will be conveyed, to the Second Party after receiving
instructions from the Government in this regard.
Thus, the Agreement between the aforesaid two parties will be as
under:-
1. Whereas The Second Party has paid 25% of the total
tender/auction amount according to the demand letter and
remaining 75% amount will be deposited together with the
interest, as fixed by the Government, by the Second Party in 10
half yearly installments without any default from the date of
execution of the Agreement;
2. Whereas the payment of the installments as indicated above
will be paid by the Second Party compulsorily by the prescribed
time limit, failing which or in case of failure to deposit two
consecutive installments, this Deed of Agreement will become
void and the First Party shall be free to exercise its
discretionary power to forfeit 1/4th of the total deposit and
refund the remaining amount and the First Party, if desired so,
shall be free to enter the land in question and shall have right
to sell it in favour of any third party;
3. Whereas 25% of the total tender amount has been paid by
the Second Party and for rest of the 75% amount an agreement has
been reached at between the parties. Possession of the land in
question is being delivered by way of the instant Agreement.
Therefore, according to the prevailing Greater Scheme
(Mahayojana) of 2001, if the Second Party produces building map,
it will be considered for approval, holding thereby that the
possession of the land is with the Second Party, that the Nazul
Land in question or building constructed on it can be
transferred only when the entire tender/auction amount and the
total expenditure payable by that time are cleared to the First
Party. Sale Deed in respect of the Nazul Land will be executed
on the stamp paper by paying required stamp fees. Stamp fee and
other expenses will be borne by the Second Party;
4. Whereas the Second Party shall deposit the remaining
aforementioned tender amount in 10 half yearly installments
under relevant accounts titled "0075 legal general services-105
Sale of Land & Property -03 lump¬sum amount on converting Nazul
land into freehold property" by the prescribed date by treasury
challan/ bank draft in main branch of the State Bank at Lucknow;
5. xxx xxx xxx
6. xxx xxx xxx
7. xxx xxx xxx
Witness:
1.
2. V K Gupta
Special Nazul Officer/Joint Secretary
LDA, Lucknow”
(underlining is ours)
3.11. Simultaneously, Certificate dated 12.1.1996 was issued by LDA
showing delivery of possession of plot No.92A/C to Shri Jagdish Gandhi.
The same reads as under:
“Office of the Lucknow Development Authority
(Nazul Department) Lucknow
Possession Certificate
Possession of Nazul land Khasra No. 92-A/C(754), area 7305
sq. ft., situated at Mahanagar, Faizabad Road, Lucknow is handed
over to Sh. Jagdish Gandhi, Manager, City Montessori School,
Lucknow today 12.1.1996.
Boundary of the above mentioned land is as under:-
East - Road Mount Carmel School
West - Land of City Montessori School
North - Sh. M M Banerjee’s house
South - Faizabad Road
Signature of the person to whom Signature of the person who
possession is delivered delivered the possession
(Jagdish Gandhi) (P K Mishra)
Ameen, L.D.A.”
3.12. Although the management of respondent No.1 knew that the balance
price is required to be paid in ten six-monthly installments, it
deliberately omitted to do so and performed the ritual of sending one
letter every year to the functionaries of LDA on the issues of demarcation
of land and fixation of installments to show that the balance amount could
not be paid due to LDA’s failure to indicate the amount required to be
deposited along with interest.
3.13. After 13 years of the execution of agreement and taking possession
of the plot, respondent No.1 filed Writ Petition No.8514/2009 with the
following substantive prayers:
“(i) Issue a writ, order or direction in the nature of mandamus
directing the respondents to accept forthwith the total amount
of sale consideration with regard to plot no. 92-A/C 754 along
with interest whatsoever may be fixed either by this Court or by
the respondents;
(ii) Issue an appropriate writ, order or direction in the nature
of certiorari to quash the entire proceedings of conferring free-
hold rights on the respondents no. 4 & 5 on the said plot no. 92-
A/C 754 Mahanagar Lucknow which has already been purchased by
the petitioner in auction as hold on 09.01.05 and the agreement
dt. 12.01.96 been executed by the respondent no. 3 in favour of
the petitioner and possession has also been delivered vide
possession certificate dt.12.01.96 after, summoning the record
of the proceedings from the office of the opp. Party no. 2 & 3”
3.14. In the meanwhile, Shri Banerjee filed Writ Petition No.446/1996 and
prayed that the State Government, LDA and the Nazul Officer may be
restrained from taking any action in violation of lease deed dated
14.2.1959 or give strip of garden lease to any other person without taking
proceedings in accordance with law or convert the same for any other
purpose. The same was disposed of by the High Court vide order dated
30.8.2005 with an observation that if any action is taken by respondent
Nos.3 and 4 in violation of the terms of lease then the writ petitioner
shall be free to approach an appropriate forum.
3.15. During the pendency of Writ Petition No.446/1996, the State
Government issued another order dated 17.2.1996 for conversion of Nazul
land from leasehold to freehold and made the same applicable to the cases
in which the lease had already expired but the lessee was continuing in
possession. The primary object of this order was to legitimize the
continued illegal occupation of land by the erstwhile lessees.
3.16. With a view to take advantage of the policy contained in order dated
17.2.1996, Shri Banerjee submitted application dated 23.3.1996 to the Vice-
Chairman, LDA for conversion of plot No.A-92, Faizabad Road, Mahanagar into
freehold. He submitted another application dated 29.3.1996 to the Special
Nazul Officer, LDA with similar prayer by stating that the plot had been
allotted to him for the purpose of gardening. Along with the first
application, Shri Banerjee annexed photostat copy of lease deed dated
29.1.1964, which related to plot No.92 A/C. The application made by Shri
Banerjee was not entertained by LDA on that ground that after the expiry of
lease period, the plot was auctioned and the bid given by respondent No.1
had been accepted.
3.17. When the management of respondent No.1 started construction of
boundary wall on plot No.92A/C, Shri Banerjee raised objection by claiming
that he was in lawful possession of the plot. Thereupon, respondent No.1
filed Suit No.58/1996 for permanent injunction. The trial Court prima
facie felt convinced that respondent No.1 was having possession of the plot
and passed injunction order dated 22.2.1996, which was confirmed on
13.5.2002.
3.18. Shri Banerjee died on 10.5.1996. After about two years, the
appellants submitted application dated 17.3.2008 for mutation of their
names in respect of plot No.92A. They claimed that by virtue of Will dated
14.7.2005 executed by the deceased, they had become owners of the plot.
After some time, they filed Writ Petition No.5049/2008 with the grievance
that the application made by them was not being decided by the competent
authority and prayed for issue of direction to LDA to sanction mutation
in their favour. The Division Bench of the High Court passed an interim
order dated 6.6.2008 and directed the Nazul Officer, Lucknow to consider
and decide the application made by the appellants. Thereafter, LDA passed
order dated 25.3.2009 and sanctioned conversion of plot No.92/A from
leasehold to freehold. Thereafter, the appellants deposited Rs.4,97,692/-
as conversion charges.
3.19. During the pendency of Writ Petition No.5049/2008, appellant No.2 –
Chandak Banerjee filed Suit No.538/2008 for a declaration that auction held
pursuant to advertisement dated 20.12.1994 was illegal and inoperative. He
also prayed that the respondents be restrained from interfering with his
possession over plot No.92A/C. The appellants also filed Writ Petition
No.4085/2009 for issue of a mandamus to LDA to convert leasehold rights
into freehold in respect of plot No.92A/C. The same was disposed of by the
High Court vide order dated 4.5.2009, which reads as under :
“Heard Sri Pratish Kumar, learned counsel for the petitioners,
learned Standing Counsel for opposite party no.l and Sri D.K.
Upadhyay, learned counsel for opposite parties no.2 and 3.
The petitioner has alleged that a lease of appurtenant land
bearing Plot No.92 A/C measuring 6 Biswas 5 Biswansis 13
Kachwansis (7188 sq.ft.) situated at Mahanagar was granted in
favour of Sri M.M. Banerji by the Nazul Officer, Lucknow for
gardening purpose for a period of seven years.
Learned counsel for the petitioners submits that Sri M.M.
Banerji, predecessor in interest of the petitioners in pursuance
of the Government Order dated 17.02.1996 had applied for free
hold rights of the property after depositing the requisite
amount but till date no decision has been taken by the Nazul
Officer, Lucknow with respect to the free hold rights to the
petitioner who are successors of late Sri M.M. Banerji, who was
the original lease holder.
In view of the aforesaid facts, we dispose of the writ petition
with a direction to the opposite party no.2 to take a final
decision with respect to the free hold rights of Nazul Plot
No.92 A/C, situated at Mahanagar Lucknow within two months from
the date a certified copy of this order is produced."
3.20. In compliance of the direction given by the High Court, the Nazul
Officer passed order dated 3.8.2009 and converted 4433 sq. feet of land out
of the total area of 7188 sq. feet of plot No.92A/C into freehold. The
remaining area was retained for widening the road. On next day, the
appellants deposited conversion charges amounting to Rs.1,95,939/-.
3.21. In the writ petitions filed by them, the appellants did not implead
respondent No.1 as a party, but the latter impleaded them as respondent
Nos.4 and 5 in Writ Petition No.8514(M/B) of 2009. Respondent No.1 also
gave details of the cases filed by the parties and annexed copies of the
orders passed by the Civil Courts and the High Court. The appellants
contested Writ Petition No.8514/2009 and pleaded that the State Government
did not have the power to ordain delivery of possession of the plot to
respondent No.1 because the bid given by it had been cancelled by LDA on
account of non payment of the balance price. They also pleaded that
agreement dated 12.1.1996 was nullity and was not binding on them.
3.22. After noting the factual matrix of the case, the Division Bench of
the High Court considered the question whether respondent No.1 could seek a
mandamus for enforcement of agreement dated 12.1.1996 and answered the same
in negative by making the following observations :
“Though we accept and hold in
terms of the legal submissions, as above, urged by Shri Shanti
Bhushan, Learned Senior Counsel, yet looking to the factual
background of “Though we accept and hold in terms of the legal
submissions, as above, urged by Shri Shanti Bhushan, Learned
Senior Counsel, yet looking to the factual background of this
case, we are of the considered view that the impugned agreement
entered into between the petitioner and the official respondents
on 12.01.1996 would not be enforceable in law after the lapse of
a period of 13 years only on the strength of depositing an
amount of Rs.7,40,700/-, said to be the one-fourth of the total
consideration amount. It appears that the petitioner engaged
itself only in correspondence with the official respondents and
in litigation, in stead of paying the rest of the principal
amount, leaving aside the interest amount, which could have been
determined later by the Authority concerned. Even no efforts
were made to seek direction from the Courts to accept the
deposit of principal amount before the filing of this writ
petition. It also appears that the initial agreement was
cancelled on 14.06.1995 for default in depositing the rest, say,
3/4th of the consideration amount which had been demanded vide
the letters dated 21.02.1995 and 08.03.1995. However, taking a
considerate view, on a written request made by the petitioner
school, the payment schedule was rearranged vide the agreement
dated 12.01.1996 but again no amount was deposited towards the
payment of any of the instalments. Thus, the petitioner school
was not ready and willing to perform its obligation under the
agreement and in Law.”
3.23. The Division Bench then adverted to the appellants’ plea that the
direction in Writ Petition No.4085 (M/B) /2009 cannot be nullified by
entertaining a petition filed under Article 226 of the Constitution and
held that they are not entitled to get the plot in dispute by paying the
paltry amount of Rs.1,95,939/-. This is evinced from the following
extracts of the impugned order :
“Here, in the instant case, the garden lease in respect of the
property in question was granted for a brief period of 7 years
in favour of Shri Moni Mohan Banerjee, the predecessor in
interest of private respondent nos.4 and 5, which expired in
1968. As per the condition of garden lease agreement, the plot
in question was to stand surrendered to the State after the
expiry of lease deed. Moreover, after the garden lease period
was over, no effort was made by Shri Moni Banerjee for a renewal
and perhaps, it was also not renewable under the terms of the
lease deed. Thereafter, the land was converted into a
commercial property, and it was advertised for auction sale
wherein the tender of the petitioner school being the highest
bidder was accepted and a lease agreement was executed between
the petitioner and the official respondents. Simultaneously,
the possession of the property was also delivered to the
petitioner school. It is also noticeable that Shri Moni Mohan
Banerjee did not participate in the auction sale despite having
knowledge about the status of property through the
advertisement. It is only when the petitioner school wanted to
construct a boundary wall that Shri Moni Mohan Banerjee put a
resistance and went in litigation but in none of the litigations
any title in respect of the property was settled in favour of
Shri Banerjee or his successors in interest. Shri Moni Mohan
Banerjee had no sanction of any lease agreement or Government
order to continue with possession of the property and as noticed
above, even some attempts were also made by the official
respondents to take back the possession of property from Shri
Moni Mohan Banerjee and his successors. Thus, the official
respondents had a clear intention that the impugned property was
in illegal possession of Shri Moni Mohan Banerjee. Moreover,
with the efflux of time between 1968 and 1996 when the
Government Notification dated 17.02.1996 was issued to provide
for conversion of lease hold right into freehold right, in
respect of Nazul lands in occupation of people, the nature of
land had been changed to commercial property and it was put to
auction. Thus the claim of private respondents had become stale
which could not have been revived by a direction of this Court
to consider or take a final decision on the application of
respondent nos.4 and 5 in view of the ratio of Judgment in C.
Jacob's case (supra) and the property could not have been
settled for a paltry amount of Rs.1,95,939/- whereas the same
property was sold in auction for an amount of over Rs.29 lacs in
favour of the petitioner way back in 1995, and presently, its
market price is over Rs.2 Crore. The direction to consider the
claim of respondent nos.4 and 5 was passed in Writ Petition
no.4085 (MB) of 2009 vide the order dated 04.05.2009, which on
reproduction reads as under:
xxx xxx xxx
It is a settled principle of law that if an authority is
directed to consider the case, it should consider judiciously on
merit and in accordance with law and not arbitrarily causing a
huge loss to public exchequer under the umbrella of a Court's
order directing to consider or take final decision on the case.
Thus, the order of official respondent nos.2 and 3, Lucknow
Development Authority and Nazul Officer, as also the demand
notice and subsequent proceedings regarding grant of freehold
right in favour of private respondent nos. 4 and 5 deserve to be
and is hereby quashed.”
3.24 Notwithstanding its finding that a mandamus cannot be issued for
enforcing agreement dated 12.1.1996, the High Court virtually allowed the
writ petition of respondent No.1 by relying upon the 2009 Act and directed
the official respondents to hand over possession of the plot No.92 A/C to
the said respondent and execute the sale deed on payment of market price at
the current rate. The reasons recorded by the High Court for granting
relief to respondent No.1 are as under:
“Needless to say that this Court is not only the court of law
but also a Court of equity and, therefore, its decision must
subserve the cause of justice and in an appropriate case it may
grant such relief to which the writ petitioner would be entitled
to in law as well in equity. Equity is not anti-law but a moral
dimension of law. Rather it is a grace and conscience of living
law, and thus, a Court's discretion is to be exercised with
circumspection within the precincts of justice, equity and good
conscience while keeping in view the given facts and
circumstances of the case.
Thus, taking into consideration the facts that the Parliament
has passed the Right to Education Act, that the petitioner
deposited 25% (Rs. 7,40,700/-) of the consideration amount way
back in 1995, and that he is ready to pay the present market
price of the plot whereas no such offer has come from private
respondent nos. 4 and 5 during the course of hearing, we think
it expedient in the interest of justice to direct the settlement
of property in question in favour of the petitioner school upon
making payment of cost price at the current market rate
prevailing in the locality.
In the premises set out hereinabove, we partly allow the writ
petition with direction to official respondents to hand over the
possession of the plot in question and execute the sale deed
after completing necessary procedural formalities on payment of
market price at current rate prevailing in the locality where
the plot is situated within a period of two months from the date
of receiving a copy of this order. In case, the petitioner fails
to pay the market price at current rate to be determined by the
authority concerned, the official respondents would be at
liberty to invite fresh tender for the auction of the same at a
price not less than the prevailing market price so that the
public exchequer is not made to suffer in any manner and the
property is able to fetch the maximum price.”
4. Learned counsel for the appellants argued that the direction given by
the High Court is legally unsustainable and is liable to be set aside
because in the writ petition filed by it, respondent No.1 had not claimed
relief. He further argued that letter dated 12.1.1996 sent by the State
Government to the Vice-Chairman, LDA with a direction to hand over
possession of four plots to Shri Jagdish Gandhi and to accept the balance
price in ten six-monthly installments with interest as also the agreement
executed between the State Government and respondent No.1 were nullity
and the mere fact that respondent No.1 had paid 25% of the bid amount
could not be made basis for indirect revival of the agreement after a gap
of almost 15 years. Another argument of the learned counsel is that the
writ petition filed by respondent No.1 was highly belated and the High
Court committed serious error by entertaining the same.
5. Shri Shanti Bhushan, learned senior counsel appearing for respondent
No.1 argued that agreement dated 12.1.1996 was binding on the parties and
the High Court committed serious error by declining to issue a mandamus
for its enforcement only on the ground that respondent No.1 had not paid
the balance price. Learned senior counsel relied upon Rules 50, 50A and
51 of the Nazul Manual and the provisions of the 2009 Act and argued that
having accepted the bid of respondent No.1, LDA and its functionaries
could not refuse to act in accordance with the agreement. Learned senior
counsel submitted that the installments of price could not be paid by
respondent No.1 because despite repeated representations, LDA neither
gave the schedule of installments nor indicated the rate of interest.
Learned senior counsel laid considerable emphasis on the fact that
respondent No.1 is a charitable institution and argued that even though
it may have committed default in payment of the balance price, the High
Court was not justified in directing payment of current market price as a
condition for transfer of the plot in question.
6. Before dealing with the respective arguments, we consider it necessary
to mention that even though the prayer made in Writ Petition No.11/1995
gives an impression that respondent No.1 was claiming relief in respect
of plots for which tender notice was issued on 24.11.1994, the contents
of paragraphs 15 to 34 thereof clearly show that respondent No.1 was
really claiming plot No.92A, Faizabad Road, Mahanagar, Lucknow of which
lease was granted to Smt. Rajrani Srivastava sometime in 1958. We may
also mention that the Will executed by Shri Banerjee in favour of the
appellants was only in respect of plot No.92-A.
7. The first question which merits consideration is whether the conclusion
recorded by the High Court on the issue of enforceability of agreement
dated 12.1.1996 is correct and respondent No.1’s prayer for issue of a
direction to LDA to accept the balance price was rightly rejected. It is
an admitted position that in response to tender notice dated 20.12.1994,
respondent No.1 gave bids for four plots including plot No.92A/C and paid
25% of the price offered by it but did not pay the balance amount
necessitating cancellation of the bid, about which intimation was given
vide letter dated 14.6.1995. Respondent No.1 did not challenge the
cancellation of bids by availing appropriate legal remedy but its Manager
succeeded in convincing the Governor of the State to pass an unusual
order for handing over possession of the plots and acceptance of the
balance amount in six-monthly installments. The reasons which prompted
the Governor to act in violation of the rules of business and ordain
restoration of the plots in favour of respondent No.1 albeit without
setting aside the decision of LDA to cancel the bids are not borne out
from the records produced before this Court. Therefore, we hold that the
order passed by the Governor and the consequential actions taken by the
State Government and LDA including the execution of agreement dated
12.1.1996 did not create an enforceable right in favour of respondent
No.1 and the High Court rightly declined to issue a mandamus to LDA to
accept the offer made on its behalf for payment of the balance price.
8. It is significant to note that agreement dated 12.1.1996 contained an
unequivocal stipulation that if respondent No.1 fails to pay the
installments of balance price within the prescribed time limit then the
agreement would become void and LDA will be free to sell the plot to any
other person. Admittedly, respondent No.1 did not pay the instalments of
balance price. Therefore, the agreement stood automatically terminated
and LDA became entitled to dispose of the plot by adopting an appropriate
mechanism consistent with the doctrine of equality enshrined in Article
14 of the Constitution. It is rather intriguing as to why the
functionaries of LDA remained silent for more than 13 years and did not
repossess the plot in question. This was perhaps due to the pressure
brought by the Manager of respondent No.1 from different quarters,
administrative as well as political.
9. The next question which requires consideration is whether the High Court
could invoke the provisions of the 2009 Act and direct LDA to hand over
possession of plot No.92A/C to respondent No.1 and execute the sale deed
on payment of market price at the current rate. In the writ petition
filed on behalf of respondent No.1 it was not claimed that in view of the
provisions contained in the 2009 Act, LDA is bound to allot plot No.
92A/C or allow respondent No.1 to retain the plot for which its bid had
been accepted by the competent authority. Therefore, neither the
appellants nor the official respondents had the opportunity to controvert
such claim and show that the provisions of the 2009 Act do not provide
for allotment/sale of land to the educational institutions. The High
Court has made a passing reference to the 2009 Act and granted relief to
the respondent No.1 only on the ground that it had already deposited 25%
of the bid amount way back in 1995 and respondent Nos.4 and 5 had not
made an offer to take the plot by paying the current market price. We
have carefully gone through the provisions of the 2009 Act and find that
they do not even remotely deal with the issue of allotment of land to the
educational institutions. Therefore, the Division Bench of the High Court
was not at all justified in ordering transfer of the plot to respondent
No.1 and that too by ignoring its own finding that the said respondent
was a ranked defaulter and the writ petition was filed after a time gap
of 13 years without any tangible explanation.
10. The Nazul Rules on which reliance has been placed by Shri Shanti
Bhushan do not have any bearing on the issues raised in these appeals.
Rule 50 of the Nazul Rules lays down that in all cases, whether of sale
or of new leases or of renewal of leases which have expired without
option of renewal which involves a concession in favour of the vendee or
the lessee, e.g., in which it is proposed to fix the sale price or the
rent at a rate lower than the prevailing market rate or at which it is
proposed to sell or lease the land without holding a public auction or
inviting public tenders, prior approval of the State Government shall be
obtained before sanction, even though such cases, owing to the value of
the land being within the limits laid down in the rules, could otherwise
be sanctioned without reference to the State Government. Rule 50-A deals
with lease of small stretches for gardening purposes and lays down that
such lease shall be for a short period not exceeding seven years and
shall be subject to the conditions enumerated in that rule. Rule 51
deals with grant of lease or sale of nazul land at concessional rates for
charitable purposes like, hospitals, educational institutions and
orphanages. It further lays down that the concession shall not exceed
half the annual rental in the case of lease or half of the total market
value in the case of sale. Two provisos to this rule specify the limits
of concession. Rule 52 contains a non-obstante clause and empowers the
State Government to sanction a lease or sale of nazul land for the
particular purpose and at the particular rate keeping in view the special
circumstances of the case. These rules do not, in any manner, support the
cause of respondent No.1 because it failed to pay the price of land in
terms of the bid given pursuant to tender notice dated 20.12.1994 or even
in terms of agreement dated 12.1.1996 and tried to concoct evidence to
show that LDA was the defaulter.
11. The issue which remains to be considered is whether the appellants are
entitled to plot No.92 A/C and the High Court committed an error by
quashing the action taken by the LDA and the Nazul Officer in furtherance
of order dated 4.5.2009 passed in Writ Petition No.4085/2009. It is not
in dispute that the term of the garden lease had ended on 31.7.1968 and
the same was not extended by the competent authority. Therefore, in view
of the stipulations contained in lease deed dated 29.1.1964, he was bound
to hand over the plot to the Government. However, Shri Banerjee continued
to unauthorisedly occupy the plot till its disposal by LDA in 1994 by
inviting bids. Although, respondent No.1 also failed to abide by the
terms of agreement dated 12.1.1996, Shri Banerjee was not entitled to
take benefit of order dated 17.2.1996 and seek conversion of leasehold
rights into freehold because LDA had already accepted the bid given by
respondent No.1 and delivered possession of the plot to Shri Jagdish
Gandhi. The appellants who claim to be beneficiaries of the Will executed
by Shri Banerjee cannot claim a better right. Writ Petition No.4085/2009
filed by them was nothing but an abuse of the process of law.
Unfortunately, the Division Bench of the High Court, which disposed of
the writ petition vide order dated 4.5.2009 did not even bother to call
upon the respondents to admit or controvert the averments contained in
the writ petition filed by the appellants and directed the Nazul Officer
to decide their representation for grant of freehold rights in respect of
plot No.92A/C. The error committed by the High Court in entertaining the
writ petition of the appellants was compounded by the Nazul Officer who
ordered conversion of leasehold rights into freehold rights in respect of
4433 sq. ft. and gave an opportunity to the appellants to grab a valuable
piece of land by depositing a paltry amount of Rs. 1,95,939/- as against
the market price of Rs.2 crores. It is a different thing that the
appellants did not succeed in their design and the High Court quashed the
action taken by the Nazul Officer for conversion of the plot.
12. In the result, Civil Appeal No. 10181 of 2011 is partly allowed and the
direction given by the High Court for handing over possession of plot No.
92 A/C to respondent No.1 on payment of the current market price is set
aside. However, the decision of the High Court to quash the action taken
by LDA and the Nazul Officer in furtherance of order dated 4.5.2009
passed in Writ Petition No. 4085 of 2009 is upheld. Civil Appeal No.
10180 of 2011 is dismissed. For filing frivolous and unwarranted
litigation, which has consumed substantial time of various Courts
including this Court, the appellants and respondent No.1 are saddled with
cost of Rs. 10 lakhs each. They are directed to deposit the amount of
cost with the Supreme Court Legal Services Committee within a period of
two months from today.
13. Respondent No.1 is directed to hand over possession of plot No.92A/C to
the Vice-Chairman, LDA within a period of 15 days. If the appellants have
managed to take possession of the plot then they shall surrender the plot
to the Vice-Chairman, LDA with 15 days. Thereafter, LDA shall dispose of
the plot by public auction keeping in view the propositions laid down by
this Court in Akhil Bhartiya Upbhokta Congress v. State of Madhya Pradesh
(2011) 5 SCC 29 (paragraphs 65 and 66). It is needless to say that
respondent No.1 shall be free to participate in the auction which may be
conducted by LDA in compliance of this order. The appellants shall be
free to withdraw the amount deposited for conversion of plot No.92 A/C.
…..……….....……..….………………….…J.
[G.S. SINGHVI]
…………..………..….………………….…J.
[SUDHANSU JYOTI MUKHOPADHAYA]
New Delhi,
July 02, 2012.
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