Calcutta High Court (Appellete Side)
Smt. Jayanti Paul & Ors vs Kolkata Metropolitan Development ... on 14 November, 2011
Author: Jayanta Kumar Biswas
Bench: Jayanta Kumar Biswas
1
In The High Court At Calcutta
Constitutional Writ Jurisdiction
Appellate Side
Present :
The Hon'ble Mr Justice Jayanta Kumar Biswas
W.P. No.17296 (W) of 2009
Smt. Jayanti Paul & Ors.
v.
Kolkata Metropolitan Development Authority & Ors.
Mr. Saktinath Mukherjee, senior advocate, with Mr. Deba Prasad Mukherjee, Mr. Debjit Mukherjee
and Mr. Santanu Chatterjee, advocates, for the petitioners. Mr. Partha Sarathi Basu, advocate, for
K.M.D.A.
Last heard on : 11. 11. 2011.
Judgement on : 14. 11. 2011.
The Court : The petitioners in this art.226 petition dated September 22, 2009 are
questioning a decision of the Kolkata Metropolitan Development Authority (hereinafter referred to
as "the Authority") dated September 15, 2009(p.59).
The relevant parts of the decision are quoted below:
"With reference to the above, this is to inform you that 200 Sq.mtr. of HIG plot was allotted to Sri
Bibhuti Bhusan Paul. After actual measurement of the plot no.C-15, under BPADP measuring 200 Sq.mtr.
the possession of land was delivered to you. According to terms & conditions of the Lease deed executed
with you on 15.07.1988, the allottee had to complete of the construction of the residential house within
5(five) years from the date of execution of Lease deed i.e. within 1993. Within this period even the
permission from the Kolkata Muicipal Corporation for construction had not been obtained. The allottee later
passed away in 1995. However, it is found that you have not as yet started construction. This is clearly
against the terms & conditions of the Lease deed executed by you.
Therefore, as per the terms & conditions enumerated in the Lease deed, the offer of allotment of
plot no.C-15, HIG is hereby cancelled and possession of land delivered is withdrawn. Lease deed executed
thus stands cancelled.
The amount paid by you will be refunded after deduction of 20% as service charge."
Clause 2(iii) of the lease deed provided as follows:
"2.The LESSEE to the intent that the obligations and covenants shall continue throughout the
period of demise agrees and covenants with the Authority as follows:-
................................................................................................................................
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(iii) At the own cost of the LESSEE who has been allotted plot, within five years from the date hereof or within such further time as the Authority may at its option allow in writing on sufficient and reasonable grounds, to erect, construct and complete a house or building for being used for residential purposes with boundary walls, sewers and drains in accordance with plans, sections and specifications as may be approved by the appropriate body according to the rules and regulations framed for the purpose."
Clause 4 of the lease deed provided as follows:
"4.(i) If there be any breach of any covenant on the Lessee's part herein contained and to be performed or observed or any of the terms and conditions hereof, then in the said cases it shall be lawful for the Authority at any time thereafter to re-enter upon the demised premises or any part thereof in respect of any breach of the Lessee's covenants herein contained.
(ii)Any notice requiring to be served hereunder shall be sufficiently served on the Lessee if addressed to him on the demised premises or forwarded to him by registered post or left at his last known address in India and shall be sufficiently served on the Authority if delivered to the office of the Deputy Director(Marketing and Management) against proper receipt. A notice served by post shall be deemed to be given at the time when in due course of a registered post it would be delivered at the address to which it is sent.
(iii) Any relaxation or indulgence granted by the Authority to the Lessee or by the said Lessee to the Authority shall not in any way prejudice the rights of the parties under this Deed of Lease."
Mr. Basu appearing for the Authority, and relying on the decision I gave in Haldiram Ltd. v. State of West Bengal & Ors., (2009) 1 Cal LT 158 (HC), and the decisions in State of Orissa v. Ram Chandra Dev, AIR 1964 SC 685, Bareilly Development Authority & Anr. v. Ajai Pal Singh & Ors.,(1989) 2 SCC 116, Indu Kakkar v. Haryana State Industrial Development Corporation Ltd & Anr., AIR 1999 SC 296, Bhavnagar University v. Palitana Sugar Mill (P) Ltd., (2003) 2 SCC 111 and Supriyo Basu & Ors. v. W.B. Housing Board & Ors., (2005) 6 SCC 289, - has questioned the maintainability of the petition.
Mr. Basu has heavily relied on the case stated in sub-para.(c) of para.3 of the opposition dated March 23, 2010 filed on behalf of the first seven respondents.
Sub-para.(c) of para.3 of the opposition is quoted below:
"c) It is an admitted case that during the lifetime of the writ petitioner No.1's husband, the very important and relevant clause in the Lease deed was violated whereby the writ petitioner was supposed to start the construction work within a period of 5 years from the date of execution of the said lease deed, which was made on 15th July, 1988 and thus the construction in question ought to have been started on or before 14th July, 1993 and accordingly the default clause has automatically come into force and the same became effective with effect from 14th July, 1993. It is also an admitted fact that during this period when the 3 writ petitioner No.1's husband, who was the original allottee, did not take any steps to get the period extended up to the year 1995 and as such the question of getting any relief from this Hon'ble Court automatically fails."
Mr Basu has argued that the petitioners' remedy, if any, was only before the Civil Court, for in the absence of any public law element involved in the cancellation of the lease by the Authority in exercise of its pure private law contractual right, the sole source whereof is the contract between Bibhuti and the Authority, the petitioners are not entitled to seek the public law remedy under art.226. He has also relied on an unreported decision dated April 18, 2008 I gave in AST No.872 of 2008 (D.C. Industrial Plant Services Private Limited & Anr. v. Kolkata Metropolitan Development Authority & Ors.).
Mr Mukherjee appearing for the petitioners has justified the maintianability of the petition relying on passages from Mulla's the Transfer of Property Act, 1882, 10th ed., and the decisions in the Municipal Corporation of Greater Bombay v. Lala Pancham & Ors., AIR 1965 SC 1008, Raja Dhruv Dev Chand v. Raja Harmohinder Singh & Anr., AIR 1968 SC 1024, R. K. Saxena v.Delhi Delvelopment Authority, (2001) 4 SCC 137, Teri Oat Estates (P) Ltd. v. U. T., Chandigarh & Ors., (2004) 2 SCC 130, ABL International Ltd. & Anr. v. Export Credit Guarantee Corporation of India & Ors., (2004) 3 SCC 553, Haryana Urban Development Authority v. Vijay Aggarwal, (2005) 9 SCC 446, Karnataka State Financial Corporation v. N. Narasimahaiah & Ors., (2008) 5 SCC 176, Aslam Mohammad Merchant v. Competent Authority & Ors., (2008) 14 SCC 186 and Karnataka State Forest Industries Corporation v. Indian Rocks, (2009) 1 SCC 150.
Mr. Mukherjee has contended as follows. Article 300A does not protect a contract; it protects a property; and the expression "law" in the article includes art.14 that mandates that every State action must be fair, reasonable and non-arbitrary. Once a lease is executed it no longer remains a mere contract; it becomes a property. Hence, in view of art.300A, the petitioners could not be deprived of their property by an unfair, unreasonable and arbitrary cancellation of the lease; and they, raising a question concerning right to property, are entitled to seek the public law remedy under art.226.
According to Mr. Mukherjee, the decision cancelling the lease is an executive order passed by the Authority in exercise of its executive power. His submission is that in view of the decision in 4 DLF Qutab Enclave Complex Educational Charitable Trust v. State of Haryana & Ors., (2003) 5 SCC 622 the petitioners are entitled to question the order before the Writ Court, for they are contending that the order passed unfairly, unreasonably and arbitrarily has deprived them of their property save by authority of law and hence in contravention of art.300A.
Mr Mukherjee has distinguished the decision in Haldiram Ltd. v. State of West Bengal & Ors., (2009) 1 CalLT 158(HC) saying as follows. That was a case of a licence concerning a commercial plot for a commercial complex, not for residential purpose. A licence creates a possessory right in a property, a lease an interest; and what is protected under art.300A is a property that includes a lease. The petitioners are the owners of the leasehold and since injustice has been done to them, they can certainly question the action before the Writ Court.
The question is whether dubbing the cancellation of the lease by the Authority an unfair, unreasonable and arbitrary State action and hence violative of art.14 and consequently of art.300A, the petitioners can challenge it under art.226 contending that the Authority has deprived them of their property save by authority of law.
Article 300A of the Constitution of India is as follows:
"300A. Persons not to be deprived of property save by authority of law. - No person shall be deprived of his property save by authority of law."
In my opinion, there is no reason to say that the prohibition put by art.300A is against every thing, body or authority that the expression "the State" denotes for the purposes of art.14; for it is only a Government that, in exercise of its sovereign power, can deprive a person of his property.
Article 14 provides that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. And in view of the definitions given in arts.12 and 36, it is only in Parts III and IV that the expression "the State", unless the context otherwise requires, is to include the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.
5The prohibition in art.300A, in my opinion, is that no Government shall deprive any person of his property save by authority of law. Law, as was held in Jilubhai Nanbhai Khachar & Ors. v. State of Gujarat & Anr., 1995 Supp(1) SCC 596, means law made by the Parliament or a State Legislature, a rule or a statutory order having force of law and, in my opinion, not the concept of fairness, reasonableness and non-arbitrariness in State action enshrined in art.14, though the concept can be applied while testing the constitutional validity of the law under authority whereof the incident of deprivation occurs.
When the Government deprives a person of his property citing the authority of such a law, the deprivation can be challenged either on the grounds that it is not according to the law, or that it is by authority of an unconstitutional law. Hence in neither case the person challenging the deprivation is entitled to say that since, on the facts of the case, the Government has acted unfairly, unreasonably and arbitrarily, the deprivation is violative of art.14 and consequently of art.300A. A deprivation of a property is violative of art.300A only when it is not by authority of law, i.e. when it is by authority of an invalid law.
When the person is a private law lessee, as is the case here, and invoking a clause of the lease, the lease has been determined by his lessor that is a State within the meaning of art.12, he is not entitled to say that since the decision to determine the lease, on the facts of the case, is unfair, unreasonable and arbitrary, he has been deprived of his property save by authority of law. Article 300A has no manner of application to such a case. It prohibits deprivation of property by an executive action not authorised by law, not by exercise of pure private law contractual right conferred by the contract between the parties one of whom is a State within the meaning of art.12.
In Jilubhai Nanbhai Khachar & Ors. v. State of Gujarat & Anr., 1995 Supp (1) SCC 596 it was held that the word 'property' "connotes everything which is subject of ownership, corporeal or incorporeal, tangible or intangible, visible or invisible, real or personal; everything that has an exchangeable value or which goes to make up wealth or estate or status"; and that property, therefore, "within the constitutional protection, denotes group of rights inhering citizen's relation to physical thing, as right to possess, use and dispose of it in accordance with law."
6In that case their Lordships held that the word 'property' used in art.300A must be understood in the context in which the sovereign power of eminent domain is exercised by the State and property expropriated.
There is no dispute that a leasehold is a property of the lessee, and that a right to property is both a human right and a legal right. Hence the authorities cited in support of these propositions do not require any specific consideration. But this does not mean that the lessor, when it is a State within the meaning of art.12, can be required by the art.226 Court to refute an allegation that its decision to exercise its pure private law contractual right to re-enter upon the demised property being unfair, unreasonable or arbitrary is violative of art.14 and consequently of art.300A.
In case of determination of a private law lease the only question is whether the determination is according to the lease; and the question is to be adjudicated only in proceedings or suit instituted seeking private law remedy. Adjudication of the question by the High Court under art.226 applying the concept of fairness, reasonableness and non-arbitrariness in State action enshrined in art.14 will be entirely de hors the terms and conditions of the private law contract between the parties, - and hence an impermissible act.
None of the authorities relied on by Mr Mukherjee even remotely supports the proposition that when a State within the meaning of art.12 cancells a private law lease asserting right under the lease, and not by authority of any law or by any executive action, the lessee can question the action under art.226 contending that since, on the facts, the cancellation is unfair, unreasonable and arbitrary, it is violative of art.14 and consequently of art.300A. I, therefore, do not think it is necessary to deal with them for ascertaining their respective ratios.
On the other hand, the decision in Haldiram Ltd. v. State of West Bengal & Ors., (2009) 1 CalLT 158 (HC), relied on by Mr Basu, fully supports his contention that questioning the cancellation of the lease the petitioners cannot seek the public law remedy under art.226.
In Haldiram, the Authority granting Haldiram a licence to use a plot cancelled the licence in exercise of its right conferred by cl.7(i) of the deed of licence. It was a right to re-enter upon the land after determining the licence. The licence was determined alleging breach of terms and 7 conditions of the licence that provided that steps for project construction would be taken within the period mentioned in the deed.
The question that was considered in Haldiram will appear from what was recorded in para.7 (of the report) quoted below:
"7.Mr Basu, counsel for KMDA, has raised the preliminary objection that questioning KMDA's action leading to the decision determining the licence, and seeking enforcement of clauses of the contract dealing with rights and liabilities of the parties regarding execution of a deed of lease, Haldiram is not entitled to approach the Writ Court under Article 226 of the Constitution of India. His contention is that since no public law element is involved in the action leading to the decision taken by KMDA in exercise of its pure private law contractual rights available under the deed of licence, and Haldiram has no public law right to seek enforcement of any clause of the contract, Haldiram's remedy, if any, is only before the appropriate Civil Court, and not before the Writ Court."
After considering quite a large number of decisions, in Haldiram I held as follows:
"60.In my view, the test that should be applied for getting answer to the question is what is the basis of the action complained of. If the action is taken in exercise of any power or right the sole source whereof is not the contract itself, then a writ petition questioning the action is maintainable. On the other hand, if the action leading to the impugned decision is taken in exercise of a right conferred on the State by the contract, then no writ petition questioning such action and decision is maintainable......."
In this case it is evident from the impugned decision that the Authority has cancelled the lease in exercise of a right the sole source whereof is the lease itself - a pure private law contract whose terms and conditions were binding on both the lessor and the lessee. Hence correctness of the cancellation is not to be examined by the Writ Court in a public law remedy proceeding applying the public law test of fairness, reasonableness and non-arbitrariness in State action enshrined in art.14. The petitioners' private law remedy, if any, was before the Civil Court.
I am unable to accept the argument that the Authority has cancelled the lease by passing an executive order in exercise of its executive power. It is evident from the decision that the Authority has cancelled the lease in exercise of its pure private law contractual right flowing solely from the terms and conditions of the lease.
An Authority that is a State within the meaning of art.12 is under an obligation to exercise powers conferred on it in consonance with the provisions of art.14, meaning thereby that the action 8 must be fair, reasonable and free from arbitrariness. But, in my opinion, the Authority, when exercises a right conferred on it by a private law contract, is not under any corresponding obligation to exercise the right in consonance with the principles of fairness, reasonableness and non- arbitrariness in State action enshrined in art.14, for there is a clear distinction between a public law power and a private law right.
For these reasons, I dismiss the petition on the grounds that it is not maintainable and making it clear that nothing herein shall prevent the petitioners from approaching the Civil Court. No costs. Certified xerox.
Ab (Jayanta Kumar Biswas, J.)