Gujarat High Court
Kutch Salt And Allied Industries Ltd ... vs Union Of India Through Principal ... on 1 July, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, Mohinder Pal
C/LPA/484/2014 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 484 of 2014
In
SPECIAL CIVIL APPLICATION NO. 160 of 2013
With
CIVIL APPLICATION NO. 3911 of 2014
In
LETTERS PATENT APPEAL NO. 484 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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KUTCH SALT AND ALLIED INDUSTRIES LTD THRO
AUTHORISED....Appellant(s)
Versus
UNION OF INDIA THROUGH PRINCIPAL SECRETARY &
22....Respondent(s)
================================================================
Appearance:
MR AMIT PANCHAL WITH MS SHIVANI RAJPUROHIT, ADVOCATE for the
Page 1 of 28
C/LPA/484/2014 JUDGMENT
Appellant(s) No. 1
DELETED for the Respondent(s) No. 5 - 18 , 20 - 21
DS AFF.NOT FILED (N) for the Respondent(s) No. 7 - 18 , 20 - 21
MR VISHAL PATEL, AGP for the Respondent(s) No. 4
MR SN SOPARKAR SR ADVOCATE WITH MR DHAVAL D VYAS,
ADVOCATE for the Respondent(s) No. 2 ,
MR D D VYAS, SR ADVOCATE WITH MR DIPEN SANKHESHARA FOR M/S
VYAS ASSOCIATES , ADVOCATE for the Respondent(s) No. 2 ,
MR SHAKEEL A QURESHI, ADVOCATE for the Respondent(s) No. 1 , 3
NOTICE SERVED BY DS for the Respondent(s) No. 19 , 22
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 01,02/07/2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The appeal is directed against the judgement of learned Single Judge dated 18.3.2014 passed in Special Civil Application No.160/2013.
2. Facts leading to this appeal are as under :
2.1. The appellant original petitioner is a company registered under the Companies Act and is engaged in the business of salt manufacturing. The appellant company was granted 2873.30 acres of land on lease for a period of 30 years on 5.3.1963 by respondent no.2 Kandla Port Trust ("KPT" for short). Likewise, similar lease for 30 years was granted for land admeasuring 1016.87 acres on 4.2.1964 for the same purpose.Page 2 of 28
C/LPA/484/2014 JUDGMENT 2.2. Clause9 of the lease deed provided as under :
"Lessee observing and performing of the agreement, covenant and conditions hereof will on expiration of the term reserved herein, be granted at his/her option, a new lease on demised premise by way of renewal for a further period of 30 years to commence from the date of expiry thereof on such condition as lessor may in his absolute discretion then determine."
2.3. The lease period of 30 years thus expired in the year 1993. The petitioner made an application on 24.3.1992 seeking renewal of lease for a further period of 30 years as envisaged in clause9 of both the original leases.
2.4. On 16.12.1992, KPT asked the appellant to agree to removal of semi permanent structures.
2.5. Under letter dated 31.12.1992, the appellant reiterated the request for renewal of lease without reduction of area of lease land.
2.6. By letter dated 22.6.1994, the appellant once again requested KPT to extend the lease for a further period of 30 years. This was repeated in the communication dated 5.2.1996.
2.7. On 19.8.1997, KPT wrote to the Government of India requesting for approving its decision to extend the lease period by 20 years with effect from 11.1.1993.
Page 3 of 28C/LPA/484/2014 JUDGMENT 2.8. By letter dated 6.10.1997, the appellant requested KPT to consider the renewal of lease for 30 years instead of 20 years recommended. On 9.12.1997, such request was repeated. On 23.5.1998, the appellant made such request to the Union of India also.
2.9. By letter dated 11.2.2000, KPT conveyed to the appellant that the Central Government has granted approval for renewal of lease for a period of 20 years with effect from 10.1.1993. The lease period therefore, would expire on 9.1.2013. The terms on which such renewal was offered were also indicated in the said communication. Relevant conditions read as under :
"i) M/s. Kutch Salt & Allied Industries Ltd should give specific undertaking to effect that in the event of the land earmarked in the to as per Plan is required by the Port Trust for Port purpose at any time the lease shall hand over peaceful possession of the land without any demure, for implementing the Master Plan.
ii) The lease shall not be automatically renewable. The lessee shall pay the lease rent at the revised ground rent of Rs.65/ per, acrs per annum or part thereof. The tannura of applicability of this rate will expire on 5.7.99 and thereafter the new rates as revised by the competent authority shall be applicable for the remaining period of lease.
xv) The leased property can be resumed at any time before the expiry of the lease period, if required by the Government in the national interest with six months notice on payment of compensation in accordance with Page 4 of 28 C/LPA/484/2014 JUDGMENT the formulation as may be approved by the Government.
If the lease is cancelled for not complying with conditions of lease compensation shall be payable by the Port."
In the concluding portion of the letter it was stated as under :
"You are requested to pay immediately the duesi specified at Sr. No.iii, viii & ix above i.e. Rs.23,90,399/ and convey your unconditional acceptance to the terms & conditions appended above and make the payment within period of 30 days, failing which, interest at the rate of 18% will be charged. You are also requested to produce a copy of salt manufacturing licence issued by Salt Department, Government of India. The lease rent has been calculated upto 24799 only as stated under condition no.3 above. You have submitted the cheque for Rs.1,86,810/ under your letter No.244 992000 dated 10.1.2000. The balance amount of Rs.22,03,589/ may please be cleared."
2.10. Under letter dated 19.5.2000, the appellant accepted all such terms and conditions including extension of lease period by 20 years. Such letter reads as under :
"The Chairman Kandla Port Trust, Gandhidham(Kutch) Dear Sir, Reg : Renewal of Lease of our Salt works at Kandla We acknowledge with thanks receipt of your letter No. Page 5 of 28 C/LPA/484/2014 JUDGMENT PF/LW/PL1235IX/4005 dated 11.2.2000 in connection with the Renewal of our Kandla Salt Works admg 3891 acres for further period of 20 years w.e.f. 10.1.1993 to 9.1.2013 subject to terms and conditions appended therein.
As desired by you, we convey our unconditional acceptance of the terms and conditions mentioned in the aforesaid letter.
Meanwhile, we would also like to draw your kind attention to clause9 of the agreement which may kindly be looked into.
Thanking you, once again."
2.11. Lease agreement was entered into between the parties on 27.6.2001. Some of the important conditions of the lease deed were as under :
"(viii) On expiry of the Lease or its sooner determination by the Lessor in accordance with the terms of this Lease, the Lessee shall remove all their machinery, structures of whatsover nature put up by them and restore the demised premises in its reimbursed condition without being in anyway entitled to be reimbursed for any loss or damage suffered by them by such determination and yield up the demised premises to the Lessor.
9. The lease shall not be automatically renewable.
14. The leased property can be resumed at any time before the expiry of the lease period, if required by the Port Trust/Central Govt, in the national interest Page 6 of 28 C/LPA/484/2014 JUDGMENT for its own use with 6 months notice on payment of compensation in accordance with the formulation as may be approved by the competent authority. If the lease is cancelled for not complying with the conditions of lease, no compensation shall be payable by the Port.
25. Also in the event of lease being not renewed for fresh terms or on determination or forfeiture of the lease for any reasons whatsoever and the lessee fails or neglects to deliver back the possession of the land forthwith to the Port Trust from the date of determination of the lease and/or from the date of completion of the lease term, the Lessee shall be liable, till the actual date of delivery of possession to Port Trust, to pay damage per month for use and enjoyment of the said land a sum not exceeding the amount of six annual installments of ground rent prescribed for the plot and the quantum of the said damages so fixed shall not be open to Lessee to question and the decision of Chairman, in this regard shall be final.
It is hereby, expressly declared that exercise of power by the Chairman Kandla Port Trust under this clause shall not preclude him from taking any action under any other relevant terms and conditions."
2.12. On 21.1.2006, KPT resolved in its General Board meeting to set up a Special Economic Zone ("SEZ" for short) by reserving a minimum 3600 hectares of area for the projects like Container Terminal ship Bunkering LNG Terminal and Ship repair facilities subject to approval of the Ministry of Commerce and Industry.
2.13. Since the land allotted to the appellants under the said lease was required by KPT for the purpose of Page 7 of 28 C/LPA/484/2014 JUDGMENT SEZ, KPT wrote to the appellant on 3/11.11.2009 stating that :
"An area of land admeasuring 3891 acres alloted to M/s Kutch Salt & Allied Industries Ltd, falls within the aforesaid development, and therefore it has been decided to resume the portion of land, details of which are mentioned herein below...."
2.14. On 6.5.2010, the appellant thereupon wrote to the KPT stating that now only 32 months of the lease period remains which expires on 10.1.2013. The project of KPT was still at the proposal stage, the same has not materialised. Finalisation of the project may take a long time. It was therefore, requested that "we may be allowed to hold and enjoy and possess the land in question for the remaining period of lease."
2.15. On 30.6.2011, the Board of Directors of KPT resolved not to terminate the existing lease of the appellant but also that there shall not be any further renewal of such leases.
2.16. On 18.1.2012, the appellant applied to the KPT for extension of the lease for a further period of 10 years or in the alternative to renew the entire lease for a period of 30 years. On 9.6.2012, the appellant again wrote to the KPT and requested for renewal of the lease for a period of 30 years. In such communication, the appellant also contended that the previous extension of lease for a period of 20 years was unlawful. The appellant referred to clause9 of the original lease which Page 8 of 28 C/LPA/484/2014 JUDGMENT envisaged renewal of lease for a period of 30 years on completion of lease period.
2.17. On 31.5.2012, the KPT reiterated its decision not to renew the lease beyond 10.1.2013.
2.18. The appellant filed writ petition being WP(C) No.7114/2012 before the Delhi High Court challenging the decision of the KPT not to renew the lease further. Such petition was disposed of by order dated 9.11.2012 by learned Single Judge of Delhi High Court recording that the petitioner only sought disposal of applications dated 8.1.2012 and 9.6.2012 seeking renewal. The respondents were asked to pass a speaking order setting out their stand with regard to the same. The grounds taken in the writ petition would also be considered. The speaking order would be communicated to the petitioner and the petitioner would have liberty to take recourse to appropriate remedy in case order of KPT was adverse to it.
2.19. The chairman, KPT thereupon passed a detailed speaking order dated 29.12.2012 considering various issues raised by the appellant in the representations and eventually declined to grant any further extension. He noted that as per the directions of the Delhi High Court (in another litigation), leasehold rights that may be granted by KPT would have to be auctioned so that maximum price could be fetched. He also noted that KPT was under instructions from Government of India to keep in abeyance the cases of leases of Port lands till Page 9 of 28 C/LPA/484/2014 JUDGMENT final view is taken by the authority. He also noted that the land in question would fall in the area earmarked for SEZ. Interalia on such grounds, the representations of the appellant came to be turned down.
2.20. The appellant thereupon once again approached the Delhi High court by filing Writ Petition(C) No.62/2013. Learned Single Judge of Delhi High Court disposed of the petition observing that after some arguments learned counsel for the petitioner sought leave to withdraw the petition with liberty to approach appropriate forum. The petition was accordingly disposed of as withdrawn with liberty as prayed for.
2.21. The appellant thereupon, filed abovenoted Special Civil Application No.160/2013. In the said petition the appellant prayed for a direction to KPT for extension of lease for a further period of 10 years or in the alternative to grant renewal of entire land for a period of 30 years. The petitioner also challenged the decision of the chairman of KPT dated 29.12.2012 rejecting the representations of the appellant. This writ petition came to be disposed of by the learned Single Judge by a detailed judgement which has given rise to this Letters Patent Appeal.
3. Before adverting to and dealing with the rival contentions, we may also take note of some of the decisions of the Courts having a bearing on the present litigation.
Page 10 of 28C/LPA/484/2014 JUDGMENT
4. In Special Civil Application No.16316/2012 and connected petitions, KPT had challenged various orders passed by the District Court in the proceedings arising out of the Public Premises (Eviction of Unauthorised Occupants) Act. The KPT was aggrieved by the District Court refusing to permit eviction of leaseholders whose leases had expired and the KPT had as in the present case not granted extension for similar reasons. Learned Single Judge of this Court by judgment dated 26.12.2013 allowed all these petitions of KPT. Aggrieved parties carried the matter before the Supreme Court. SLPs were however, dismissed by an order dated 7.2.2014.
5. Bunch of petitions being Special Civil Application 18842/2011 and connected petitions filed by various other salt manufacturersleaseholders came up for consideration before the Learned Single Judge when likewise their leases were not extended. All these petitions were dismissed by judgement dated 27.2.2012. Thereupon the writ petitioners filed LPAs. Division Bench by judgement in case of Urvakunj Nicotine Ltd. v. Union of India & ors reported in 2012(3) GLH 301 dismissed all such appeals. SLP against such judgement came to be dismissed by Supreme Court by order dated 27.7.2012.
6. It appears that in a public interest petition filed before Delhi High Court, the said Court was considering the larger issue of possible irregularities in granting leases to salt manufacturers. Series of orders were passed to inquire into such aspects. In one such proceeding before the Delhi High Court on 9.9.2009, the Court directed that till further Page 11 of 28 C/LPA/484/2014 JUDGMENT orders, ASG is directed not to execute/renew any lease except in accordance with the guidelines issued by the Ministry of Shipping in 2014. On 15.12.2010, Delhi High Court recorded as under :
"Though many a issues have been raised today by the learned counsel for the parties yet, at present, we are only inclined to address to one issue whether there should be renewal of lease beyond March, 2011. There has to be a long debate on this issue and on the points which have been canvassed by Mr.Prashant Bhushan with regard to noninitiation of prosecution against the officers concerned and the action required to be taken against the Joint Secretary, Ministry of Shipping. In praesenti, we only record that Mr.Chandhiok has assured this Court that before the next date of hearing, no further renewal of lease shall take place without leave of this Court......"
7. Thereafter, on 12.10.2011, Delhi High Court recorded as under :
"Two issues are to be addressed to in this writ petition. First pertains to the lease of land belonging to Kandla Port Trust. The petitioner had made the grievance that even when the lease in respect of land belonging to Kandla Port had expired, the lease (sic) allowed to continue. This issue has almost been resolved by various orders passed by this Court in this petition from time to time. The position which emerges is that the Kandla Port Trust authorities are now to lease through public auction and the lease are to be granted for production of salt. The terms on which the auction takes place have also been finalized. The persons who will be the successful bidders in the auction would be given lease only for the aforesaid purpose and such a condition, as Mr.Chandhiok, learned ASG, says, has already been included in the ETender cum EAuction for allotment of Plots between Village Padana and Village Page 12 of 28 C/LPA/484/2014 JUDGMENT Chirai for production of salt on 30 years lease on as is where is basis and the same would be included in the lease deed as well quoted in terms of orders dated 4.4.2011. "Mr.Chandiok, learned ASG, also submitted that the persons whose lease have come to an end and are in illegal occupation, in respect of some to them eviction order have already been passed by the Estate Officer and in some cases proceedings before the Estate Officer are in progress. Mr.Chandhiok, further informs that those person against whom eviction orders have been passed have filed the appeal under section 9 of the Public Premises (Eviction of Unauthorised Occupants) and the District Judge has passed the orders that these appeals will be decided within 2 months, though, in the meantime, status quo orders are passed.
In these circumstances, we expect that all proceedings under section 9 of the Public Premises (Eviction of Unauthorised Occupants) would be concluded within three months from today."
8. It is a common ground that this statement continued from time to time. In the same litigation, the counsel for Union of India on 12.10.2011, further stated as under :
"Mr. Chandhiok, learned ASG also submitted that the persons whose lease have come to an end and are in illegal occupation, in respect of some to them eviction order have already been passed by the Estate Officer and in some cases proceedings before the Estate Officer are in progress. Mr. Chanhiok further informs that those person against whom eviction orders have been passed have filed the appeal under section 9 of the Public Premises (Eviction of Unauthorised Occupants) and the District Judge has passed the orders that these appeals will be decided within 2 months, though in the meantime, status quo orders are passed."Page 13 of 28
C/LPA/484/2014 JUDGMENT
9. In this background, the present appeal came to be filed. Before the learned Single Judge the petitioner present appellant had taken various contentions. The learned Judge in a detailed consideration came to the conclusion that the petitioner was not entitled to any further extension of lease period. Reliance to clause9 of the original lease for the year 1963 and 1964 was untenable. The learned Judge was of the opinion that the petitioner having accepted the lease for a period of 20 years and enjoyed such extension for over eight years after the same was granted, at the fag end of the period, could not turn around and claim as a matter of right that lease may be extended further. The right of KPT to recover the possession for setting up SEZ was also accepted. On such grounds the writ petition was dismissed. In conclusion it was observed that for any reason, if KPT decides not to go ahead with the existing plan (for setting up SEZ) and thereafter decides to put the subject lands on auction for salt manufacturing, the petitioner shall be treated as an existing lesseee and thereafter, be give the option to match the highest bidder as provided in the New Land Policy of 2014.
10. Before us, learned counsel Shri Amit Panchal for the appellant had mainly focused on the request of the appellantpetitioner for being granted fresh lease upon auction. Though he did not abandon the appellant's prayer for renewal of lease for a period of 10/30 years, his thrust of the argument was that KPT must hold auction for granting lease of the lands in question. If the appellant can match the highest bidder, as an existing leaseholder it would have a preferential claim. His main plank for such Page 14 of 28 C/LPA/484/2014 JUDGMENT prayer was that KPT cannot put the lands in question to use for developing the SEZ. This was neither feasible nor legally permissible. That being the position the public interest would demand that salt manufacturing activity be continued. Discontinuation of such activity for no apparent reasons would result into considerable revenue loss for KPT and also production loss to the country. The appellant had created infrastructure by sizeable capital investment. Hundreds of families survive on such activity. Discontinuation of activity without proper reasons would thus cause irreparable loss of investment made by the appellant and disturb the families of labourers who survive on such activity. In his words decision of KPT should be reversed for the following reasons :
i) that the land is sought to be taken back from the appellant under the pretext that it is required for setting up of SEZ, wherein in reality the Kandla Port Trust as of today does not have an existing/pending application, nor does it have any permission as required for setting up SEZ;
ii) that even the New land Use Policy of 2014 earmarks the area occupied by the appellant for salt manufacturing;
iii) that the resolutions passed by the Board of Trustees of Kandla Port Trust also emphasizes on the fact that the lands occupied by the appellant are not required by the Kandla Port Trust, until the other vacant lands are exhausted and hence, according to the Board same shall be permitted to be used by the appellant for a period of 10 years, in the interest of revenue;
iv) that the appellant has invested around 109 crores out of which around 5560 crores is capital investment;Page 15 of 28
C/LPA/484/2014 JUDGMENT v) the learned Single Judge in paragraph 39 of the
impugned judgment, has been pleased to observed that if Kandla Port Trust does not require the lands of the appellant then the appellants may be given an opportunity to compete with the highest bidder and be given priority with regard to the same."
11. On the other hand, learned senior counsel Shri S.N. Soparkar and Shri D.D.Vyas for KPT opposed the appeal contending that the appellant had after detailed correspondence agreed to accept extension of the lease for 20 years. At the fag end of the period of lease, the appellant cannot be allowed to reverse its stand. Extension of lease was never a matter of right. KPT needed the land for development of SEZ. When the land was not to be leased for the purpose of salt manufacturing, question of considering the appellant's claim did not arise. It was pointed out that entire prayer in the petition was for renewal of lease. Prayer for holding fresh auction was beyond the scope of writ petition.
12. From the above materials, it can be seen that the appellant was initially granted leases for a period of 30 years in the year 1963 and 1964. Such leases were combined and a common extension was offered to the appellant for a further period of 20 years. The appellant had at the time of completion of first period of 30 years prayed for fresh renewal by another period of 30 years. KPT however, insisted on renewal only for 20 years. Government of India also approved fresh lease only for a period of 20 years. Though the initial lease period expired in the year 1993, the correspondence and negotiations Page 16 of 28 C/LPA/484/2014 JUDGMENT between the parties continued for several years thereafter. The appellant in the meantime continued to enjoy possession and use of the leased lands. It was finally in the year 2000 that the issues were resolved between the appellant and the KPT. On 11.2.2000, KPT finally conveyed to the appellant that lease could be extended only for a period of 20 years and that the appellant should unconditionally accept the offer if it was desirous of extension of lease. It was also indicated that there shall be no automatic renewal of the lease at the end of the period. On 19.5.2000, the appellant unconditionally accepted the terms of such offer. The matter does not rest here. In terms of such correspondence between the parties, a formal lease deed was also entered into on 27.6.2001. We have taken note of the terms of offer of extension of lease contained in letter dated 11.2.2000 of KPT and terms of lease deed dated 27.6.2001. Both envisaged extension of lease for entire block of land for a further period of 20 years starting from 10.1.1993. The appellant thus consciously and overtly accepted the terms and conditions of renewal of lease. Essential condition of lease thereof was that fresh lease would be for a period of 20 years starting from 10.1.1993. Significantly, the request of the appellant that such renewal for a period of 30 years as envisaged in clause9 of the original lease was not accepted. In the letter dated 19.5.2000, accepting the terms of fresh renewal, the appellant did refer to clause9 of the earlier lease, nevertheless, in the same breath also accepted all the terms of offer of KPT unconditionally. It was further culminated into a formal lease agreement being signed by the parties. For all purposes thus the appellant accepted Page 17 of 28 C/LPA/484/2014 JUDGMENT the offer of KPT for extension of lease for a period of 20 years. This lease agreement specifically envisaged that there would be no automatic renewal upon completion of the lease period. The lease in fact envisaged premature termination of lease on certain grounds.
13. Before the lease period were to expire KPT made attempt to reclaim the land under the clause envisaging premature termination since KPT had harboured an idea of setting up SEZ. The appellant however, on 6.5.2010 requested KPT that lease was granted for a period of 20 years. Such period would expire on 10.1.2013. Barely 32 months were left. KPT may therefore, allow to enjoy lease for the remainder of the period. KPT thereupon dropped the idea of reclaiming the land by activating premature termination clause. In such resolution dated 30.11.2011, however, KPT decided not to extend the lease beyond 10.1.2013.
14. Looked from any angle, view of the learned Single Judge that the appellant petitioner could not have asked for or at any rate insisted on renewal of the lease, does not call for any interference. The terms and conditions of the fresh lease dated 27.6.2001 were vitally different from the earlier lease agreements of the year 1963 and 1964. Unlike in the earlier leases, clause9 contained in lease of the year 2000, did not have any clause for extension on completion of the lease period. It infact envisaged that there would be no automatic extension. The appellant having enjoyed the extension of lease, under such agreement, at the fag end of the lease period could not have contended that such terms Page 18 of 28 C/LPA/484/2014 JUDGMENT and conditions were invalid. Seeking extension of lease on some other independent right flowing from statute or equity would be entirely a different matter. Contention of the appellant that initial extension itself was for a period of 20 years which was 10 years short of the initial 30 years of renewal envisaged in clause9 of the leases of the year 1963 and 1964, cannot be allowed to be raised. If the appellant had any dispute about such shorter period of renewal, the appellant ought to have opposed the stand of the KPT in this respect at the relevant time, if not before signing of the lease, atleast shortly thereafter.
15. The appellant instead accepted such terms unconditionally, enjoyed the extension of lease for eight years after the agreement was signed by the parties. At one stage, when KPT had planned for premature termination of lease. Appellant requested that atleast for remainder period of lease, the appellant may be allowed to continue its operation. This request of the appellant was accepted by KPT by resolution dated 30.11.2011. However, in the same resolution, it was also decided that there shall be no further extension beyond the normal period of lease which was to expire on 10.1.2013. Even otherwise automatic extension of lease be it for 10 or 30 years period, would be opposed to the orders passed by the Delhi High Court and the statement made by the counsel for Union of India before the said Court in in public interest petition. We may recall that Delhi High Court was inquiring into larger questions of alleged irregularities in the allotment of lands of KPT for salt production and other leases. In such public interest petition, as noted above, orders have been passed Page 19 of 28 C/LPA/484/2014 JUDGMENT from time to time. KPT is not authorised to grant fresh lease without public auction. The request of the appellant therefore, either for renewal of lease for a full fresh period of 30 years or for extension of existing lease period for a period of 10 years would thus be opposed to the assurance given by the Union of India to Delhi High Court. We have also noticed that in cases of all other similarly situated leaseholders whose leases had expired from time to time, who had approached various Courts including this court for appropriate protection against their eviction, all these petitions have been dismissed. Letters Patent Appeals and SLPs whenever filed have also been rejected. Shri Panchal did point out a few recent orders of learned Single Judges granting interim relief against eviction. These proceedings are however, at interim stage and no final judgement to the contrary was brought to our notice.
16. Shortly, before the lease period was to expire, the appellant started its communications with KPT for further extension of 10 years or for a fullfledged renewal of lease by a period of 30 years. This was simply not permissible and if KPT was in no mood to oblige, the Court would not direct it to do so since in the process KPT did not breach any legal right of the petitioner.
17. Faced with such facts, even the learned counsel for the appellant had considerably scaled down his expectations out of this appeal. His main thrust before us was that KPT must be asked to auction the plots for salt manufacturing. If the appellant as an existing lessee matched the price of highest bidder, it should be allowed to Page 20 of 28 C/LPA/484/2014 JUDGMENT continue its operations. In this context, he had also placed reliance on the observations of the learned Single Judge in the concluding portion of the judgement where it was provided that for any reason if KPT decided not to go ahead with its existing plan (of setting up of SEZ), and decides to put up the subject lands on auction for salt manufacturing and related activities, the petitioner shall be treated as an existing lessee of the subject lands and thereafter, shall be given the option to match the highest bidder as provided in the New land Policy of year 2014. As noted, the contention of the appellant was that SEZ envisaged by KPT is simply not viable and legally permissible. The only option before KPT therefore, would be to allow the land to be used for salt manufacturing. In view of the directions of the learned Single Judge, if the auction is to be held appellant would have a preferential right ofcourse subject to matching the highest price. Counsel therefore, rigorously urged that KPT must be directed to hold such auction. If the lease rights are not so auctioned, the land would remain idle. KPT would lose sizeable revenue which would be a loss to public exchequer and the appellant would suffer damage in form of infrastructural facilities already created by it. Number of families of labourers surviving on such activity would also lose their livelihood.
18. Having already held that the appellant has no right to insist on either renewal of lease for a period of 30 years or even for further extension by 10 years, the only question therefore, that requires to be decided is whether the appellant can insist that KPT must auction the lease rights of the said lands. Ordinarily, it would be the option of the Page 21 of 28 C/LPA/484/2014 JUDGMENT landowner, even if it happened to be Government or its authority, whether to let out the land for any particular purpose. KPT being the owner of the land would also enjoy such right. However, being a State within the meaning of Article 12 of the Constitution, its decision in this respect cannot be arbitrary or mala fide either in law or in facts. Full supporting material of capital investment claimed to have been made by the appellant is not on record. Exact number of labourers sustaining on such industry is also not fully established. Nevertheless, it cannot be denied that activity of this nature would require setting up of infrastructure entailing considerable capital expenditure. It would also require sufficient labour force of atleast seasonal but semi permanent nature. When thus considerable public revenue is at stake, when undisputably the appellant would have made considerable capital investment for creating infrastructural facilities and when large number of families would be sustaining on such salt manufacturing, KPT cannot at its sweet will either decide to continue such activity or bring an abrupt end for no justifiable reason. However, narrow peer review may be, the Court would certainly inquire into atleast some plausible grounds why KPT would or would not reallot the plots.
19. In this context, the stand of KPT all along has been that the plan to set up SEZ is not abandoned by KPT. It is true that due to variety of reasons, same has not yet become functional. KPT faced number of difficulties such as not been able to secure the possession of the land earmarked for such purpose and also of various clearances from different departments of the Government. However, Page 22 of 28 C/LPA/484/2014 JUDGMENT KPT still desires to set up SEZ as earlier envisaged. There are detailed replies of KPT filed before learned Single Judge as well as before us in this respect. It is not necessary to make detailed reference of such replies and specific averments made by KPT in such replies. The crux of the KPT's stand in this respect, as noted above, is that plan for setting up SEZ is still being actively pursued by KPT. In the most recent of such replies dated 18.6.2014, which occasioned due to an additional affidavit filed by the appellant on 17.6.2014, it is stated that :
"3.It is respectfully submitted that in resolution dated 6.3.2014 it is observed, after detailed deliberations, the proposal was approved, subject to examination of the suggestion given by Shri Mehta regarding inclusion of Salt works also in Sr. No.9 of the legend in the Drawing and to submit a proposal thereof separately on observance of due formalities.
4. Maintaining the said observation, it is resolved, "Resolved to approve the Revised LandUse Plan2020 AD of Kandla Port Trust as AnnexureXXVI (P74), subject to modifications in Sr. No.9 of the Legend of Annexure XXVI(P74) for lands covered therein to continue with the existing usage, put to auction initially for ten years with a review clause after five years, as deliberated above, and forward a copy of the same to the Govt. of India. Meanwhile, the Chief Engineer would prepare a detailed map on the LandUse Plan, taking into consideration all the relevant aspects and present it to the next Board for consideration of the said resolution for confirmation and approval of the revised LandUse Map.
5. In compliance of the directions of the Board, the Kandla port Trust had examined the suggested issue, and also sought legal opinion from the Advocate of the Port with Page 23 of 28 C/LPA/484/2014 JUDGMENT the permissibility of the course suggested by the trustee's. In the legal opinion received, it is also observed that the leasing of the Lands earmarked for PBSEZ is not recommended either as a matter of Law or practical point of view as explained in the opinion.
6. The opinion rendered by the learned Advocate with other materials were placed before the Board in the meeting dated 23.5.2014 taking note of the contents of the proposal, the Board 'directed the Chief Engineer to reexamine the proposal, in the light of the Legal Opinion obtained, and submit a comprehensive proposal with a detailed map on LandUse Plan, clearly demarking the legends, for appropriate consideration."
7. From the Board proceedings, it is evident that no view as yet has been taken by the Board of Trustees to apply the Revised Land Use Plan 2020 AD to the salt lands earmarked for PBSEZ.
20. The stand advanced by the appellant through the learned advocate and on pleadings on record, on the other hand was that SEZ is neither feasible nor legally permissible. The land in question being situated in ecologically sensitive zone, environmental laws would prevent any industries being set up there. Such lands can be used only for the purpose of salt production. KPT itself has also under such adverse circumstances abandoned the very plan of setting up of SEZ.
21. Primarily, we are in agreement with the objections of the counsel for KPT that examining these aspects would go beyond the scope of petition and prayers made therein.
Page 24 of 28C/LPA/484/2014 JUDGMENT However, concerned with sizeable possible revenue loss of the public exchequer, loss of capital investment made by the appellant and also the possibility of rendering large number of labourers, whose families would be sustaining on such activities jobless, we have to the limited extent of satisfying ourselves about the plausible explanation of KPT, entertained and examined these aspects. In this respect, on the available materials on record, it cannot be stated that plan of setting up SEZ is abandoned by KPT or that it is neither feasible nor legally permissible. Whether the concept is viable or not and whether ultimately after obtaining all necessary permissions, SEZ would be set up are issues not possible for us to forsee at this point of time. Economic viability of SEZ is primary concern of KPT. By the very nature of things, such project would require detailed planning, clearances and permissions from various authorities and Government agencies including environment clearances. Whether ultimately KPT would or would not succeed in getting all such permissions and clearances is not our brief at the moment. KPT insists that port related industries would be permissible in the zone though ordinary other industries may not be. Be that as it may, these are issues for KPT to address at the first level and, thereafter, by different Governmental agencies while taking up issue of granting clearances for setting up SEZ. It is not our inquiry at this stage. Suffice it to record, KPT desires to set up SEZ for which the land is required. The contention of the appellant that no application for SEZ can be made without the land being in possession of KPT and at the same time, the contention that KPT cannot be allowed to take possession without such permissions are Page 25 of 28 C/LPA/484/2014 JUDGMENT granted for setting up SEZ are self contradictory and run counter to each other. If KPT requires the possession of land for the purpose of putting its plan for setting up SEZ in motion, merely because there may be in process for some time, loss of revenue for KPT would not be a ground for us to prevent KPT from exercising its discretion for managing its affairs.
22. Looked from any angle therefore, the appeal must fail. To reiterate, the request of the appellant for extension or renewal of lease was rightly rejected by the learned Single Judge. We have given our own reasons and expression to our thoughts in this respect in addition to what was already discussed by the learned Single Judge. Insistence of the appellant that land must in that case be auctioned allowing the appellant preferential right also cannot be accepted for the reasons stated above. The learned Single Judge has already provided for a rider that in case KPT abandon the plant of SEZ and decides to go for auction, the appellant would be considered as an existing lessee. These directions are not in challenge before us at the hands of KPT. This would sufficiently protect the appellant from any arbitrary disposal of the lease rights by KPT.
23. In the result, appeal is dismissed. Interim relief granted earlier is vacated. Civil Application also stands dismissed.
24. At this stage, learned counsel Shri Panchal for the appellant requested that this judgement be stayed for a Page 26 of 28 C/LPA/484/2014 JUDGMENT reasonable period to enable the appellant to resort to further legal remedy. Such request is granted. Interim protection granted to the appellant during the pendency of the LPA shall continue till 31.8.2014.
25. Before closing, we may record that under order dated 16.6.2014, by recording brief reasons we had directed the appellant to deposit before the Registry of this Court an amount computed at the rate of Rs.23,250/ per acre per annum for the lease of land held by it for the period after 10.1.2013 till the date of order. The appellant was granted time upto 30.6.2014 to make such deposit. We are informed the appellant has deposited sum of Rs.12,98,84,773/ under two different drafts. Such amount shall be released by the Registry in favour of KPT by Account Payee cheque. The appellant shall also deposit with KPT further amount for the period upto 31.8.2014 at the same rate. This is only an adhoc formula for the appellant having occupied lease lands beyond expiry of the lease period. This shall be without prejudice to the contentions of the appellant about the rate at which the KPT can collect the lease rent an issue which we are informed is pending before the Supreme Court as well as of all contentions of KPT including that after the lease period expired, the appellant would be liable to pay penal compensation as per the KPT policy. This amount would be subject to adjustment once these disputed issue is resolved between the parties.
(AKIL KURESHI, J.)
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C/LPA/484/2014 JUDGMENT
(MOHINDER PAL, J.)
raghu
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