Jharkhand High Court
Xlri School Of Business And Human ... vs District Administration on 7 March, 2013
Author: Aparesh Kumar Singh
Bench: Aparesh Kumar Singh
IN THE HIGH COURT OF JHARKHAND AT RANCHI
---
W.P. (C) No. 6138 of 2012 XLRI School of Business and Human Resources vs. The State of Jharkhand & ors with W.P. (C) No. 6139 of 2012 XLRI School of Business and Human Resources vs. The State of Jharkhand & ors with W.P. (C) No. 6163 of 2012 Jamshedpur Utilities and Services Company Ltd vs. The State of Jharkhand & ors with W.P. (C) No. 6165 of 2012 Premium Presidency Pvt. Ltd vs. The State of Jharkhand & ors with W.P. (C) No. 6176 of 2012 Ashiana Housing Limited vs. The State of Jharkhand & ors with W.P. (C) No. 6177 of 2012 Parikh Inn Pvt. Ltd vs. The State of Jharkhand & ors with W.P. (C) No. 6199 of 2012 P and M Infrastructure Ltd vs. The State of Jharkhand & ors with W.P. (C) No. 6230 of 2012 Gian Taneja vs. The State of Jharkhand & ors with W.P. (C) No. 6257 of 2012 Center For Inner Resources Development vs. The State of Jharkhand & ors with W.P. (C) No. 6205 of 2012 Anil Chopra vs. The State of Jharkhand & ors with W.P. (C) No. 6243 of 2012 Hi Tech Heritage Limited vs. The State of Jharkhand & ors with W.P. (C) No. 6292 of 2012 Raghubir Singh Bhatia & ors vs. The State of Jharkhand & ors with W.P. (C) No. 6287 of 2012 Jawahar Lal Vig & anr. vs. The State of Jharkhand & ors with W.P. (C) No. 6305 of 2012 Jayantilal Badiyani & ors. vs. The State of Jharkhand & ors with W.P. (C) No. 6319 of 2012 M/s Kumar Inn Pvt Ltd vs. The State of Jharkhand & ors with W.P. (C) No. 6320 of 2012 M/s Bindal Buildon Pvt Ltd vs. The State of Jharkhand & ors with W.P. (C) No. 6671 of 2012 M/s Rishiraj Homes Pvt. Ltd vs. The State of Jharkhand & ors with W.P. (C) No. 6681 of 2012 Kaushal Kanchan Construction Pvt. Ltd. vs. The State of Jharkhand & ors
---
CORAM: The Hon'ble Mr. Justice Aparesh Kumar Singh
---
For the Petitioners: M/s. Jaydeep Gupta, Sr. Advocate, Abhijeet Sinha, Indrajit Sinha, Krishanu Ray and Ms. Suchitra Pandey, Advocates For the State: Mr. Ajit Kumar, AAG, For the Respondent No.4: M/s. Vinod Kanth, Sr .Advocate, G.M.Mishra, Advocate
---
Reserved on: 26.02.2013 Pronounced on: 07/03/2013
---
12/ /03/2013 In these writ petitions, petitioners have prayed for quashing of the letter no. 5 / Tata Lease Bhoomi Parivad -10/10 3058/ Ra dated 17th September 2012 issued under the signature of the Principal Secretary, Department of Revenue and Land Reforms, Government of Jharkhand and subsequently forwarded under Memo No. 473/Go dated 18th September 2012 by the Respondent No. 2- Commissioner, Singhbhum (Kolhan), West Singhbhum directing the petitioners to stop all construction activities on the plots sub-leased to the petitioners and to maintain status quo. Petitioners have also sought quashing of the letter dated 21st September 2012 issued under the signature of the Deputy Commissioner, East Singhbhum, Jamshedpur (Respondent No. 3) whereby M/s Tata Steel Limited (Respondent No. 4) has been asked to ensure stoppage of construction activities on the sub-leased plots mentioned in Schedule 'Ka' and enclosed with the letter dated 17th September 2012, which, in turn, has been communicated to the petitioners, by letter dated 22nd September 2012 issued by the Tata Steel Limited.
2. Since in all these writ petitions, the common impugned orders are under challenge, and common issues have been raised by the parties, they have been heard together. However, for noticing relevant features of the cases, the facts of WPC No. 6138/12 are being referred to herein-below, as the arguments in the batch of cases have been lead by the learned senior counsel Mr. Jaydeep Gupta, which have also been adopted by the petitioners in other cases.
3. It is also relevant to mention here that the learned senior counsel Mr. Gupta has drawn attention of the court to the orders passed in Special Leave to Appeal (Civil) No. 810/2013 by the Hon'ble Supreme Court of India vide order dated 10th January 2013 which is quoted hereunder:
"Heard.
We do not see any reason to interfere with the impugned order. The Special Leave Petitions are accordingly dismissed. The petitioners are however free to approach the High Court for an early disposal of the application for grant of interim relief. In case such a prayer is made, we hope and trust that the High court will look into the same and pass appropriate order as early as possible."
These matters have therefore been heard today on the interim relief.
4. It is the case of the petitioners that huge tracts of land were acquired in the district of East Singhbhum for establishing an Iron and Steel Plant by M/s Tata Steel Limited under the Land Acquisition Act, 1894. The same were conveyed in favour of the respondent no. 4- Tata Steel Limited through Deeds of Conveyance executed in the years 1912, 1918 and 1919 as also in the year 1929. As such, total land conveyed in favour of M/s Tata Steel Limited was 15,725.05 acres. Steel Plant was constructed by M/s Tata Steel Limited and put into production and also a planned township was developed in the vicinity known as Jamshedpur. After coming into force of Bihar Land Reforms Act, 1950, series of litigations ensued which ended after insertion of Sections 7D and 7E in the Bihar Land Reforms Act by the Amendment Act 17 of 1984. Thereafter, an agreement for lease was executed between the erstwhile State of Bihar in favour of the respondent no. 4- Tata Steel Limited on 04 th of August 1984 which was registered on 9th November 1984. Thereafter, an indenture of lease dated 01st August 1985 was executed in favour of M/s Tata Steel Limited and Agreement dated 04th August 1984 was made part of indenture of lease dated 01st August 1985. The period of lease was fixed for 40 years with retrospective effect from 01st January 1956 with a provision for further extension for a period of 30 years each at the option of the respondent no. 4 company. The original indenture of lease dated 01st August 1985 came to an end on 31st December 1995 and M/s Tata Steel Limited exercised its option for renewal on 03rd August 1995. Consequently, an indenture of lease was executed and registered on 20th August 2005 which took effect from 01st January 1996 for a period of 30 years. The lease granted by the respondent no. 4 prior to 22nd June 1970 was recognized as sub lease by deeming fiction created by Section 7E of the Act of 1950 on payment of fair and equitable rent on terms and conditions to be settled by the State Government. Learned senior counsel has relied upon the aforesaid provisions of Sections 7D and 7E of the Bihar Land Reforms Act, 1950.
"7D. Land and buildings, etc. acquired for an industrial undertaking and utilised for providing civic amenities to be deemed settled with it by the State.- (1) if any land has been acquired for an industrial undertaking under the Land Acquisition Act, 1894 (Act 1 of 1894) so much of such land and buildings and structures thereon in possession of the industrial undertaking as are being utilised for providing civic amenities, namely, health, housing, welfare, power house and education facilities to its employees and so much of the remaining portion of such land building structures thereon as are found essential on enquiry by the State Government for production processes of the industrial undertaking shall be deemed to have been leased out by the State Government with the owner of the industrial undertaking for such period as determined by the State Government subject to payment of such fair and equitable rent as determined by the State Government.
(2) The provisions of sub-section (1) shall have effect notwithstanding anything contained in section 4(a) and shall be without prejudice to the exemptions granted or concession given to intermediaries under sections 5, 6, 7A, 7B and 7C.
(3) If the claim of the industrial undertaking as to possession over the lands, buildings and structures thereon, referred to in sub-section (1) or to the extent of such lands, buildings and structure is disputed by any person within three months of the commencement of the Bihar Land Reforms (Amendment) Act, 1972, the collector shall make such inquiries in the matter as he deems fit and pass orders as may appear to him as just and fair.
(4) The provisions of sub-section (1) shall be deemed to have been inserted in this Act from the commencement thereof.
7E. Land and building, etc., acquired for an industrial undertaking and leased out by it to another industrial undertaking for its expansion by establishing new industry or to an individual to be deemed as leased with it by State Government on same terms. - If any portion out of the land acquired for an industrial undertaking under the Land Acquisition Act, 1894 (Act 1 of 1894) has been leased out by the industrial undertaking before the 22nd June 1970 to another industrial undertaking for establishment of a new industry or its expansion or to any individual or society or association for residential commercial or for such other purpose, the whole of such land, buildings or structures covered by such lease shall with effect from the commencement of this Act, be deemed to be leased to the industrial undertaking for such period as may be determined by the State Government subject to payment of fair and equitable rent as determined by the State Government and the other industrial undertaking, individual, society or association to whom lease has been granted by the industrial undertaking shall be deemed to be the sub-lessee of the original industrial undertaking and the provisions of clauses (G) and (H) of section 4 shall not be effective with respect to such land or buildings or structures thereon.
The terms and conditions of the lease granted under sub-section (1), shall be determined by the State Government.
Provided that if the period of sub-lease expires before the expiry of the lease granted under sub- section (1) then in that condition at the time of renewal of the sub-lease the State Government shall have power to revise the amount of rent payable to State Government by the lessee."
5. Learned senior counsel for the petitioners submits that the purposes for which the land has been acquired for an industrial undertaking under the Act of 1894 and has been leased out by the industrial undertaking before 22nd June 1970 to another industrial undertaking for establishment of new industrial undertaking or its expansion or to any individual or society or association for residential / commercial or for such other purpose, the whole of such land, buildings or structures covered by such lease shall, with effect from the commencement of this Act, be deemed to be leased to the industrial undertaking for such period, as may be determined by the state Government. The other industrial undertaking, individual, society or association to whom lease has been granted by the industrial undertaking shall be deemed to be the sub-lessee of the original industrial undertaking and the provisions of clauses (G) and (H) of section 4 shall not be effective with respect to such land or buildings or structures thereon.
6. Learned senior counsel for the petitioners further submits the indenture of lease dated 20th August 1985 also contains the provisions relating to sub lease of the land by M/s Tata Steel Limited in favour of any person with the prior approval of the lessor i.e. the State Government. It is further submitted that the said provision in the indenture of lease dated 20th August 1985 was inserted after the approval of the Council of Ministers in a meeting held on 19th August 2005 (Item No. 18). Clause-8 of the lease deed reads as under:
"Clause-8: That should a lessee find it necessary in future to sub lease any portion of the vacant lease in favour of any person, such allotment will be made with the prior approval of the lessor of terms to be settled. The appropriate Machinery Committee has been set up by the lessor in consultation with the lessee for expeditious disposal of such cases of sub lease."
7. It is the contention of the petitioners that appropriate Machinery Committee was set up by the State of Jharkhand by resolution no. 3874 dated 06th December 2005 and it was also mentioned therein that on the recommendation of the said Committee, final decision should be taken by the Revenue Minister, Government of Jharkhand. It is stated that such Committee has been constituted for expeditious disposal of the cases of sub lease in terms of Cabinet decision dated 19th August 2005.
8. In this background, learned senior counsel submits that an application was made by the petitioner to M/s Tata Steel Limited to allot or sub lease a piece of land in the area held by M/s Tata Steel Limited under the indenture of lease dated 20th August 2005. The proposal was duly considered by the respondent no. 4 - M/s Tata Steel Limited and in consideration of public interest and requirement of the Project, the proposal was forwarded to the Appropriate Machinery Committee for expeditious disposal of the same by seeking approval of the respondent State. The case of the petitioner was considered by the aforesaid Committee and upon consideration, a decision was taken in the said meeting to allot an area of 4.89 acres of land situate in Plot Nos. 87(P), 88(P), 89(P), 90(P), 109(P), 244(P), Khata No. 2, Ward No. 6 of Jamshedpur Notified Area Committee (JNAC). A settlement proceeding being Settlement Case No. 1/2007-08 was initiated and by order dated 15th May 2007, under the signature of the Deputy Collector, Tata Lease, Jamshedpur and further, the Additional Deputy Commissioner, East Singhbhum, the case of the petitioner was recommended for settling the aforesaid 4.89 acres of land and fix the annual rent at Rs. 7,62,840/-. The Deputy Commissioner approved the same and forwarded the matter for seeking Government orders. Thereafter, the respondent no. 2 - Commissioner, Singhbhum (Kolhan), West Singhbhum has forwarded the case of the petitioner along with others by letter dated 10th August 2007 to the State Government. Vide letter no. 3465 dated 26th September 2008 issued by the Deputy Secretary, Department of Revenue & Land Reforms, approval of the State Government was communicated. Vide letter no. 723/TL dated 10th October 2008, the decision of the State Government to approve the petitioner's case for grant of sub lease was communicated to the petitioner and the petitioner was directed to deposit the ground rent along with Cess to M/s Tata Steel Limited. Learned senior counsel for the petitioners submits that the allotted land is adjacent and contiguous to the premises of the petitioner and is to be used for running the institute in the name of XLRI School of Business and Human Resources and the area granted under the said lease is to be used as a part of the expansion programme. On 31st January 2009, petitioner was put into possession and the petitioner continued to pay rent to the Government for all these years. Thereafter, petitioner has started its construction activities strictly in accordance with the proposal approved and after approval of the building plan by the Jamshedpur Notified Area Committee (JNAC) which is to be used for residential purposes for its faculty members and senior students.
9. Learned senior counsel Mr. Gupta submits that the petitioner was shocked to receive the impugned order dated 22nd September 2012 whereby copies of the letter dated 21st September 2012 issued under the signature of the Deputy Commissioner, East Singhbhum along with the Memo dated 18th September 2012 issued by the Commissioner, Singhbhum (Kolhan Division) and letter dated 17th September 2012 issued by the Principal Secretary, Revenue and Land Reforms Department, Government of Jharkhand have been enclosed and communicated to it. Learned senior counsel submits that such communication and letters enclosed thereto disclose that a report was submitted by the then Member, Board of Revenue finding certain irregularities in the matter of grant of sub lease. In view of the report, the Government has taken the following decision:
(i) Status quo should be directed to be maintained in respect of all sub-leases so that there is no change in the physical features of the land;
(ii) A proper scrutiny should be carried out in the matters in which the procedure of sub-leasing has been completed. Show cause notice should be issued for cancellation of such allotments in which there is no justification of sub-lease and reports be made available to the State within ten days. In this process, it should be examined as to which sub-
leases are falling within the ambit of objective of the Principal Lease i.e. industrial/ civil / cultural purposes and which sub-leases have been allotted to private builders etc. primarily for private / commercial purposes.
10. Accordingly, petitioner has been asked to stop the construction activities on the plots allotted to it by way of lease and to maintain status quo. Learned senior counsel for the petitioners submits that in these circumstances, the present petitioner has moved this court in the instant writ application for quashing of the impugned orders and also for an interim relief to restrain the respondents from giving effect to or act in furtherance of the impugned letters dated 17th September 2012, 18th September 2012 and 21st September 2012 or interfering with the enjoyment of the petitioners with respect to the land sub-leased to it.
11. Similar writ petitions have also been filed by the aggrieved persons which have also been taken up today along with the instant case, facts of which have been referred to herein-above. Petitioners in other cases are also aggrieved by the orders passed by the respondent authorities asking stoppage of the construction activities and for further maintaining status quo in the matter.
12. Learned senior counsel Mr. Gupta appearing on behalf of the petitioners submits that the respondent State authorities in exercise of the executive powers conferred upon it, do not have the power for cancellation of the indenture of sub-lease which is executed between the petitioners and M/s Tata Steel Limited. It is submitted that as the Deed of Sub Lease exist between the lessee M/s Tata Steel Limited and the sub-lessee i.e. the petitioners, the respondent authorities cannot restrain the petitioners from exercising its lease hold rights since the sub lessee are also entitled to enjoy the same rights as lessee to the exclusion of others. Learned senior counsel has relied upon the judgment of the Hon'ble Supreme Court in the case of Mahendra Saree Emporium (II) versus G.V. Srinivasa Murthy reported in (2005) 1 Supreme Court Cases 481, paragraph-16 to buttress his aforesaid contention. Learned senior counsel has also relied upon the provisions of section 108 of the Transfer of Property Act to submit that the petitioners are entitled to quiet enjoyment of the property sub-leased to it. In support of the aforesaid submission, he has also relied upon a judgment in the case of British India Corporation Ltd, Cawnpore vs. Secretary of State reported inAIR (32) 1945 Allahabad 425. Learned senior counsel has also submitted that when the lessor is a State Instrumentality, it has an additional duty not to act arbitrarily or in an unreasonable manner which is essential requirement of a State within the meaning of Article 12 of the Constitution of India. Learned senior counsel for the petitioners further submits that even in the domain of public law, the exercise initiated for en bloc cancellation of sub-leases by the impugned orders, on the face of it, is arbitrary. Learned senior counsel for the petitioners has relied upon the judgment in the case of Kumari Shrilekha Vidyarthi and others vs. State of U.P. And others reported in (1991) Supreme Court Cases 212, Paragraphs-20,22,23,36 and 43 thereof. It is submitted by the learned senior counsel that the personality of the state does not undergo radical change even after making of a contract merely because some contractual rights accrue to the party in addition. Requirement of Article 14 of the Constitution of India are not alien even in such matters. Therefore, even in contractual matters, the State cannot act in arbitrary manner. Whether the impugned act is arbitrary or not, is ultimately dependent upon the facts and circumstances of the given case. Relying upon the paragraph-36 of the said judgment, learned senior counsel submits that an obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. It is further submitted that the instant case also clearly shows non-application of mind to the individual cases before issuing a general order in the nature as has been issued by the respondents for questioning the very sub-lease executed between the parties. Learned senior counsel has also relied upon the judgment in the case of Onkar Lal Bajaj and others vs. Union of India and another reported in (2003) 2 Supreme Court Cases 673, paragraphs-20 and 44 thereof. It is submitted that in a case of en masse cancellation of allotment of retail outlet for petroleum products which were the subject matters of the said case, the Hon'ble Supreme Court has observed as follows:
"20. We are not suggesting, for the present, that allotments to all or any of the persons whose names have been published in Indian Express have been made due to political connections or patronage but assuming it so, would it justify the cancellation of allotments of all those on published merit panel in respect of whom, there is no such insinuation. Is the number of the alleged tainted allottees of such a magnitude that the fair play demanded cancellation of all en masse? Did anybody apply his mind as to whether the insinuations of political connection / patronage were at least prima facie of any substance? Is such a drastic action, on the facts and circumstances of the case, not arbitrary, whimsical, and thus, unsustainable? The answer to these questions would help in determining the legality of the impugned order dated 9-8-2002."
13. Learned senior counsel has also relied upon the said judgment to submit that the facts of the present case also disclose that no individual case has been examined to find out even a prima facie case that the approval of the sub-lease has been tainted on account of extraneous consideration, fraud or misrepresentation practiced by the petitioners. A general order has been issued in which the names of 59 such allottees has been enclosed in the list enclosed with the impugned order. Learned senior counsel has also relied upon the judgment rendered in the case of Jamshed Hormusji Wadia vs. Board of Trustees, Port of Mumbai and another reported in (2004) 3 Supreme Court Cases 214, paragraphs-14, 15 and 17 thereof to submit that when the State enters into a contract and acts in the capacity of a landlord, it has an additional duty not to act in an arbitrary manner. Learned senior counsel therefore submits that the entire exercise of construction which were supposed to be completed by mid of 2013 and were intended for expansion of XLRI School of Business and Human Resources, have been suddenly stalled on account of the impugned action. Learned senior counsel submits that the petitioners have filed a supplementary affidavit on 04th December 2012 with a categorical undertaking in the terms indicated therein that any further construction activities shall be carried out at the risk and cost of the petitioners and petitioners would not claim any equity in respect of further construction to be carried out on the land in question, if the court permits the petitioners to carry out further construction on the land in question. Further, it is submitted that pursuant to the impugned orders, the petitioners have stopped all construction activities which is within the knowledge of the respondents.
14. In the background of these facts, learned senior counsel submits that petitioners have a prima facie case in their favour arising out of the sub-lease documents duly executed upon approval by the respondent Government and duly communicated to it in terms of the clause-8 of the lease deed dated 01st August 1985. It is submitted that the entire process of recommendation starting from Deputy Collector, Tata lease, Jamshedpur, Additional Deputy Commissioner, East Singhbhum and thereafter, the Deputy Commissioner, East Singhbhum as also the Commissioner, Singhbhum (Kolhan Division) was considered by the Appropriate Machinery Committee duly constituted by a resolution of the State Government dated 6th December 2005 and finally, the approval was granted by the State Government which was communicated through letter dated 26th September 2008 issued under the signature of Deputy Secretary, Department of Revenue and Land Reforms.
15. In these circumstances, when the respondents have, till date, failed to make out any case of any fraud or misrepresentation or any extraneous consideration in the grant of sub-lease, the impugned orders are unlikely to stand scrutiny before this court. Further, the petitioners cannot be restrained from enjoying the benefits arising out of sub-lease which is equal to that of a lessee as per law laid down by the Hon'ble Supreme Court in the judgment in the case of Mahendra Saree Emporium (II) (Supra). Moreover, petitioners are willing to carry out the construction activities at their own cost and risk and would claim no equity in their favour, if the case is decided otherwise. It is submitted by the learned senior counsel for the petitioners that as a result of the impugned order directing status quo and restraining any further construction, the entire developing activity in the township of Jamshedpur has come to halt.
16. Counsel for the other petitioners have adopted the arguments of learned senior counsel Mr. Gupta. Learned counsel appearing in WPC 6163/12 further submits that these constructions are being carried out after taking loan from the financial institutions and the petitioners are facing serious hardship as they have to bear the burden of the rising cost of the materials and the petitioners are answerable to the financial institutions for repayment of such loans. It has been further submitted that all the correspondences which have been relied upon by the respondents in their affidavits, are however being made between the respondent State authorities and M/s Tata Steel Limited and the petitioners were nowhere in the picture earlier. It is further submitted that till date, even under the inquiry, said to be conducted, no evidence of any fraud or misrepresentation or grounds for extraneous consideration have been made out or brought on record by the respondents. Learned Senior Advocate Mr. Vinod Kanth, appearing for Respondent No. 4-M/s Tata Steel Ltd. has also supported the case of the petitioners.
17. Learned counsel for the respondent State, on the other hand, has justified the issuance of the impugned order. Learned AAG Mr. Ajit Kumar, appearing on behalf of the State, has drawn the attention of the court to the various covenants of indenture of lease dated 20th August 2005. Learned AAG has relied upon the provisions of Clauses-2, 3, 4, 5, 6 & 7 apart from Clause-8 to submit that in respect of each categories of land, which are enumerated in the Schedule of the sub-lease document and the appendix attached thereto, purpose have been defined for which the lease is to be executed. Such as, for the purpose of providing residential facility for the employee of the lessee referred in clause-4 lands comprised in Schedule-III and enclosed in appendix-C are intended for providing civic amenities such as health, welfare, hospitals, dispensaries and clinics including veterinary hospitals, family planning and child welfare centres, conservancy depots, play grounds, stadium, community and social welfare centres, etc. Similarly, in respect of other clauses, the specific object for which lease has to be granted, have also been indicated. Learned counsel for the respondents has therefore submitted that the sub-leases which were the subject matter of the present writ applications, have been executed in a manner which is contrary to the nature of user of the land. Lands have been subleased by changing the user of the land for construction of commercial complex and for such other purposes which are not covered under the list.
18. Learned counsel for the respondents has thereafter relied upon the inquiry report which has been annexed to their counter affidavit in order to buttress his contention. Learned counsel for the respondent has relied upon the counter affidavit filed on their behalf in WPC 6243/12. It is submitted that perusal of the entire inquiry report prepared by the then Member, Board of Revenue would reveal that the inquiry officer has found that in the matter of grant of approval of sub-lease, rules of executive business have not been followed as the approval has been granted on the basis of the recommendation of the Appropriate Machinery Committee by the Revenue Minister itself, while it ought to have been placed before the Council of Ministers. It is further submitted that transparency has not been followed in the grant of approval of sub-lease. It is further submitted that the manner in which the sub-lease has been approved, has resulted in loss of revenue to the public exchequer. In the inquiry report submitted by the then Development Commissioner, he has given its finding as also suggestions. Learned AAG submits further that in the wake of the report submitted by the then Development Commissioner, respondent State is in the process of conducting an inquiry and letters have been issued to the Management of M/s Tata Steel Limited to furnish the details in respect of sub-lessee who are shown in the enclosed list (ka) while directing it to maintain status quo so that geographical condition of the land is not changed. Learned counsel for the respondent State has relied upon the communication dated 21st September 2012 contained at annexure-C series issued by the Deputy Commissioner, East Singhbhum, Jamshedpur, annexure-F dated 22nd September 2012, annexure-G dated 27th September 2012 and annexures-J and M respectively. Learned counsel for the respondents submits that M/s Tata Steel Limited have been categorically asked to prepare the details of sub- lessee to whom land has been allotted, the details of approval of the proposal by the Appropriate Machinery Committee, what all construction are being carried out and the stages of such construction over such sub-leased property. It is submitted that all constructions have been stopped in order to conduct a thorough inquiry into each individual cases as to whether there is any deviation or irregularity in the matter of grant of sub-lease in favour of such persons. It is further submitted that the respondent M/s Tata Steel Limited has lately provided an information which has also been annexed as annexure-E dated 22nd November 2012 which has been forwarded to the office of the Commissioner, Singhbhum (Kolhan Division) by their communication dated 03rd November 2012. Learned AAG has therefore contested the stand taken by the petitioners in all these writ petitions on the common grounds as indicated herein-above.
19. Learned counsel for the respondents submits that the inquiry is in the process and at the moment, no interim order should be granted in favour of the petitioners to carry on construction, as it would change the very nature of the land in question. Counsel for the respondent State has relied upon the judgment in the case of Makers Development Services Private Limited vs. M. Visvesvaraya Industrial Research and Development Centre reported in (2012) 1 Supreme Court Cases 735. He submits that in such circumstances, interim order should not be granted as ultimately if the grant of sub-lease is found to be illegal, then steps may be required to demolish the entire structures which may be erected in course of time. Learned counsel for the respondents has also relied upon the judgment in the case of Ashok Kumar Lingala vs. State of Karnataka and others reported in (2012) 1 Supreme Court Cases
321. It is further submitted on their behalf that in the matter of an interim order, the principles of natural justice were not required to be followed and therefore, the impugned orders granting status quo has been passed pending inquiry for which he relied upon the judgment rendered by the Apex Court in the case of Liberty Oil Mills and others vs. Union of India and others reported in (1984) 3 Supreme Court Cases 465. Learned counsel appearing for the State also submits that the grant of interim relief now would amount to granting the main relief and such an order should not be passed at this stage. Learned counsel has relied upon a judgment in the case of Indore Development Authority vs. Mangal Amusement Private Limited reported in (2010) 12 Supreme Court Cases 514, as also the judgment in the case of R.K. Mittal and others vs. State of Uttar Pradesh and others reported in (2012) 2 Supreme Court Cases 232 in support of their aforesaid contentions. In these circumstances, learned counsel appearing on behalf of the State submits that no interim order is required to be passed in favour of the petitioners.
20. In reply, learned senior counsel has submitted that the judgment relied upon by the then Development Commissioner in his report i.e. CWJC No. 9085/2006 in the case of Prem Chandra Mishra vs. The State of Bihar stands annulled as the writ petition itself has been withdrawn before the Patna High Court, as would appear from the order dated 31st March 2009 passed in the said CWJC No. 9085/2006 by the Division Bench of the Patna High Court. By referring to the judgment reported in (2007) 14 SCC 281, it is submitted that earlier judgment passed by the Patna High Court in the said case was set aside by the Hon'ble Supreme Court and the matter was remanded to the High Court, whereafter the said writ petition has been withdrawn. Learned senior counsel also distinguished the judgment relied upon by the petitioner in the case of Ashok Kumar Lingala (Supra) by submitting that in the said case, the Director of Mines had exercised quasi judicial power in relation to mining lease in dispute between the rival parties. It is submitted that in the instant case, the impugned orders have been passed not in exercise of any quasi judicial power by the respondent authorities. Learned senior counsel while adverting to the decision relied upon by the respondents in the case of Makers Development Services Private Limited (Supra) submits that the interim relief was denied by the High Court as there was no construction activity for the period of 7 years for permitting further construction and it was upheld by the Hon'ble Supreme Court.
21. I have heard learned counsel for the parties at length. I have also gone through the impugned orders and the inquiry report which is annexed to the counter affidavit of the State as also the correspondences made between the respondent authorities and M/s Tata Steel Limited. The indenture of lease was executed between the respondent State Government and M/s Tata Steel Limited on 20th August 2005 after obtaining approval of the Council of Ministers. Clause-8 of the sub-lease deed provides in the following terms.
"Clause-8: That should a lessee find it necessary in future to sub lease any portion of the vacant lease in favour of any person, such allotment will be made with the prior approval of the lessor of terms to be settled. The appropriate Machinery Committee has been set up by the lessor in consultation with the lessee for expeditious disposal of such cases of sub lease."
22. Petitioners made an application for grant of sub-lease on a piece of land in an area held by M/s Tata Steel Limited under the indenture of lease dated 20th August 2005. Under the resolution of the State Government dated 6th October 2005, an Appropriate Machinery Committee was set up by the State of Jharkhand for grant of such sub- lease. On the recommendation of the Appropriate Machinery Committee, duly constituted by the resolution of the State Government, Revenue Minister, Government of Jharkhand was empowered to take a decision in respect of grant or refusal of such sub-lease to such intending person. The application for grant of sub lease of the petitioners was duly forwarded by M/s Tata Steel Limited through the hierarchy of bureaucratic officials before an Appropriate Machinery Committee who considered the same in the meeting presided over by the respondent authorities of the State and upon such consideration, a decision was taken in the meeting to allot the area in question as sub-lease in favour of the petitioners. Thereafter, Settlement Proceedings vide Settlement Case No. 1/2007-08 were initiated in the case of XLRI School of Business and Human Resources in WPC No. 6138/12 and under the signature of the Deputy Collector, Tata Lease, Jamshedpur and the Additional Deputy Collector, East Singhbhum, further recommended the matter for settlement of the aforesaid pieces of land as sub-lease on an annual rent of Rs. 17,62.840/- in the case of XLRI School of Business. The Deputy Commissioner approved the aforesaid order and forwarded it. Thereafter, the office of the Commissioner also forwarded the same to the State Government. By a conscious decision taken upon recommendation of the Appropriate Machinery Committee, the State Government accorded its approval and communicated the same under the signature of the Deputy Secretary, Department of Revenue and Land Reforms. Such decision was also communicated to the petitioner by the respondents by asking it to pay ground rent along with Cess to M/s Tata Steel Limited. The petitioners thereafter came into possession of the aforesaid piece of land on 31st January 2009 and have continued to pay the rent thereafter. It is stated on behalf of the petitioners that pursuant to the grant of such sub-lease and entering into the possession over the sub-leased area, construction activities were started. It is stated that similarly in respect of other petitioners by following the aforesaid process, sublease had been executed in their favour. Thereafter, the impugned orders dated 17th September 2012, 18th September 2012, 21st September 2012 and 22nd September 2012 have been issued restraining the petitioners from carrying out any further construction and to maintain status quo. The said communication issued in the month of September 2012, are based upon an inquiry report submitted by the then Development Commissioner in the month of October 2010 itself.
23. The perusal of the entire inquiry report reveals that the then Development Commissioner has found that the rules of executive business had not been observed in the matter and the decision to grant approval of sub lease ought to have been taken by the Council of Ministers in terms of Rule 32, but the same was taken by the Revenue Minister on the recommendation of the Appropriate Machinery Committee. Therefore, the proper procedure in grant of such approval was not followed. The report further suggests that the sub-lease has been granted without laying down the procedure for grant of sub lease which should have been done by means of open bidding in respect of commercial plots so as to fetch highest revenue to the State. Further, in the constitution of the Appropriate Machinery Committee, representatives of the Finance and Law Department should also have been included. The inquiry report further indicates that no allegations of fraud or corruption have been made in the grant of sub lease, but a proper procedure has not been followed. Therefore, certain suggestions have been made by the then Development Commissioner to lay down clear cut guidelines to the Appropriate Machinery Committee for taking a decision in a transparent manner for the grant of such sub-lease. Rules of executive business should be followed by taking approval of the Cabinet before the grant of such sub-lease and open bid process should be followed if the lease is being granted for commercial purpose.
24. However, in the entire inquiry report which were submitted in October 2010 itself, there is no allegation that the sub- leases were granted by practicing fraud or misrepresentation on the part of the petitioners or others or were made on extraneous consideration. Though, the inquiry report was submitted in October 2010, the impugned action has been initiated by the letters issued in September 2012 only. Further, under the impugned letters also, no categorical findings in respect of individual sub lessee are indicated as to whether any fraud or misrepresentation, etc have been practiced in the grant of such sub-lease. It is also the case of the respondents that the inquiry is still continuing. However, none of the documents which were brought on record by the respondent State authorities through their counter affidavit till date, reveal any finding or incidence of fraud or misrepresentation or use of extraneous consideration in the grant of such sub-lease to these petitioners. The petitioners, on the other hand, are sub-lessee with whom, upon grant of approval by the competent authority of the respondent State, sub- lease has been entered into.
25. Petitioners have therefore a prima facie case in their favour. They have indulged in construction activities pursuant to the grant of such lease which has been restrained upon issuance of the impugned orders. As already stated above, respondent State have not shown or brought any materials on record, even till date, to show that any of the sub-lessee entered into with these petitioners, were actuated by fraud, malafides or extraneous consideration or by their representative. The sub lessees are also entitled to enjoyment of their rights accruing from the sub-lease deed, which can only be interfered in accordance with law by resorting to appropriate proceeding. Presently, therefore, there are no material to suggest that the respondent have any justification to restrain the petitioners from carrying out further construction by passing the impugned orders en bloc in respect of such sub lessee. The petitioners have themselves given an undertaking on affidavit in categorical terms that they are willing to carry out the construction activities at their own cost and risk. They would further not claim any equity in respect of construction carried out in the land in question, if the case is decided against them. However, the petitioner in WPC No. 6199/12 have not given such undertaking.
26. Certainty and stability is integral to the rule of law. They form the basic foundation of any fiscal system. The importance of certainty as integral to the rule of law was also emphasized by the Hon'ble Supreme Court in the judgment rendered in the case of Vodafone International Holdings BV vs. Union of India and another reported in (2012) 6 Supreme Court Cases 613. Therefore, certainty and stability is necessary to inspire confidence in the minds of the people to ensure proper development. In the case of ITC Limited vs. State of Uttar Pradesh and others reported in (2011) 7 Supreme Court Cases 493, the Hon'ble Supreme Court had occasion to consider whether completed transactions of transfer of property in a executed contract can be reopened or cancelled. The opinion of the Hon'ble Supreme in the said case as expressed in para-105 to 110 in respect of private law as well as public law in reopening or cancellation of such completed transaction of property lay down the principles in dealing with such matters.
In the facts of the present case, respondents have failed to substantiate any grounds that the transactions were vitiated by fraud, misrepresentation or undue influence or based on extraneous consideration, etc in which the transferee had any role to play. As has been observed by the Hon'ble Supreme Court, if the Government or its instrumentality are seen to be frequently resiling from duly concluded solemn transfer, the confidence of the public and the international community in the functioning of the Government will be shaken.
27. In that view of the matter, I am satisfied that the petitioners are entitled to an interim relief. Accordingly, except the petitioner in WPC No. 6199/12, rest of the petitioners are permitted to carry out any further construction in respect of the sub-leased area as per their undertaking, which shall however, be at their own cost and risk and they will not claim any equity on that account. It is also made clear that the petitioners would not create any third party right on the said properties or construction which are being permitted to be carried out. It is however desirable that the writ applications itself be heard at an early date so that issues raised in the present batch of writ petitions are resolved.
Accordingly, list the case under the heading for admission on 09th April 2013.
(Aparesh Kumar Singh, J) Ranjeet/