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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 2548 OF 2006

State of West Bengal and others …..Appellant(s)

versus

Calcutta Mineral Supply Co. Pvt. Ltd.  and another               ...Respondent(s)

WITH

CIVIL APPEAL NOs. 2549 OF 2006

Collector, Jalpaiguri and another …..Appellant(s)

versus

Darjeeling Dooars Plantations (Tea) Ltd.  and another               ...Respondent(s)

JUDGMENT

M. Y. EQBAL, J.  

These appeals by special leave are directed against the

common judgment and order dated 6.10.2005 of the Calcutta

High Court, whereby Division Bench of the High Court allowed

the writ petitions preferred by the respondents herein against

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the decision of the West Bengal Land Reforms and Tenancy

Tribunal  (in  short,  ‘the  Tribunal’)  dismissing  their  original

applications moved against the respective order passed by the

Government of West Bengal resuming the lands held by them.

2. By the impugned judgment, the High Court has disposed

of three writ petitions primarily observing that although the

facts  are  different  there are  certain communions  of  identity

within  the  question  to  be  answered  and  certain  common

principles of law are involved in the writ petitions.

3. In the matter of  Calcutta Mineral  Supply Co.  Pvt.  Ltd.

(being  Civil  Appeal  No.2548  of  2006),  the  respondent-writ

petitioner  held  the  land  measuring  about  4.54  acres

comprised in a factory or mill  together with structures even

before the West Bengal Estates Acquisition Act, 1953 (in short,

‘WBEA Act’)  came into force.  Factual matrix of this case is

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that  as  a  result  of  notification  under  Section 4  and effects

thereof  under  Section  5  of  the  WBEA  Act  all  the  land

comprised in factory vested in the State.  However, by reason

of  Section  6(1)(g)  read  with  Section  6(3)  of  that  Act,  the

Company  was  allowed  to  retain  all  the  lands  comprised  in

factory as the State Government was of the opinion that the

Company required all the lands for the purpose of the factory.

4. However,  in  1996,  it  came  to  the  notice  of  the  State

Government that the Company had alienated almost half  of

the land and no land was being used for the purpose of the

factory, which remained closed since 1993.  In exercise of the

power conferred on it by the proviso to Section 6(3) of the Act,

the State Government by order dated 2nd April, 1996 revised

the order and resumed 3.76 acres of land as surplus as in the

opinion of the State Government the company did not require

the land for the purpose of running its factory. The Company

challenged that order by way of a writ petition, which stood

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transmitted  to  the  aforesaid  Tribunal  and  was  dismissed.

Aggrieved  by  the  decision  of  the  Tribunal,  the  Company

preferred writ  petition before  the High Court.   The Division

Bench  of  the  High  Court  set  aside  order  of  the  Tribunal

holding that order dated 2nd April, 1996 was not a speaking

order  and  directing  the  State  Government  to  consider  the

matter  afresh.   Thereafter,  Special  Secretary  of  the  State

Government  passed  speaking  order  directing  resumption  of

the land allowed to be retained by the respondent-Company.

This  order  was  challenged  by  the  respondents,  but  the

Tribunal dismissed their application.   

5. Aggrieved by the decision of the Tribunal, Company again

moved the High Court by way of a writ petition, which was

allowed  by  the  Division  Bench  of  the  High  Court  by  the

impugned judgment.   The High Court quashed the order of

resumption  passed  by  the  State  Government  as  also  the

judgment of the Tribunal and held that the exercise of power

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under  the  WBEA  Act  in  the  instant  case  was  without

jurisdiction and that the respondents having held land within

the  ceiling  limit  had  acquired  the  status  of  raiyat  with

heritable  and transferable right  and cannot  be subjected to

Section 14-Z of the West Bengal Land Reforms Act.  

6. In the matter of Darjeeling Dooars Plantations (Tea) Ltd.

(being Civil Appeal No.2549 of 2006), the tea estate known as

Zurantee  Tea  Estate  (Zurantee)  was  leased  out  by  the

Government of West Bengal in favour of Chulsa Tea Company

(in short, ‘Chulsa’) being limited for a period of 30 years on

30th January, 1975.  In the record of right prepared under the

WBEA Act, the land was recorded to have been permitted to be

retained under Section 6(3)  of  the WBEA Act.   The original

lease was granted on 1st April,  1924 and expired before the

WBEA Act came into force.  In 1976, Chulsa sold Zurantee to

Darjeeling  Dooars  Plantations  (Tea)  Ltd.  (in  short,

‘respondent-Company’).   

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7. By an order dated 25th August, 1976, the tea estate was

mutated  in  favour  of  respondent-Company.   In  a  Company

Petition  of  1990,  High  Court  had  allowed  a  scheme  of

amalgamation  between  the  respondent-Company,  the

transferor, and Karala Valley Tea Co. Ltd. (in short, ‘Karala’),

the transferee, under which Scheme, the name of transferee

Karala was changed to Darjeeling Dooars and all rights, title

and interest of Darjeeling Dooars vested in it.  Subsequently

by an order dated 18th November, 1991, the Land Registration

Collector allowed mutation of the name in respect of Zurantee

in favour of Darjeeling Dooars.

8. The Government of West Bengal issued a notification on

1st June,  1994  amending  Schedule  ‘F’  of  the  WBEA  Rules

inserting Clause 1A and 1B to be incorporated in the lease

requiring payment of salami of Rs.15,000/- per hectare of land

leased out before further renewal of the lease in cases renewal

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was asked for by a transferee allowing the transferee to enjoy

the  balance  period  of  the  lease  transferred.   The

respondent-Company applied for the renewal of  lease of  the

Zurantee for a period of 30 years on 10th March, 1998 and a

deed renewing the lease was executed on 12th March, 1998 in

favour  of  the  respondent-Company.  In  March,  2002,  the

Collector demanded a sum of Rs.1,10,50,200/- as  salami in

respect of renewal of the said lease pursuant to the amended

clause,  which  was  challenged  by  the  respondent-Company

before the Tribunal.  Upon the matter being remanded by the

Tribunal,  the  Collector  again  held  that  the

respondent-Company was liable to pay salami and directed the

Company  to  deposit  the  same.   The  respondent-Company

again  moved  before  the  Tribunal  by  way  of  an application,

which was dismissed.   The Tribunal  upheld the notification

imposing  salami on transfer of tea estate.  Aggrieved by the

order, the respondent-Company moved the High Court by way

of writ petition, which was allowed by the Division Bench of

the High Court by the impugned judgment.  Holding that the

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respondent-Company  was  entitled  to  renewal  of  the  lease

without payment of salami, the High Court quashed the order

of the Tribunal as well as the order of the Collector and the

letter of demand.

9. Hence,  these  two  appeals  by  special  leave  have  been

preferred by the State Government and its functionaries under

Article 136 of the Constitution.

10. Now we shall discuss the facts and law applicable thereto

separately for better appreciation of the case of the parties.

Civil Appeal No.2549 of 2006 (Collector, Jalpaiguri and another  vs.  Darjeeling Dooars

Plantations (Tea) Ltd. and another)

11. Admittedly  in  the  year  1924,  the  appellant  granted  a

lease of the property for a period of 30 years, which expired in

1954.  The respondent continued in possession till 1974 when

a fresh lease  deed was executed on 30.1.1975 in favour  of

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Chulsa Tea Company Limited in respect of Zurantee Garden.

The lease was made effective from 25.3.1968.  Some of the

terms and conditions of  the lease which are relevant in the

present case, are as under:

“(4)(a)  That  the  Lessee/Lessees  shall  at  all  times observe  and conform to the relevant  provisions  of the West  Bengal  Estates Acquisition Rules for  the time being in force.

(b) That in respect of land comprised in a forest the Lessee/Lessees shall  be subject  to the control and supervision of the State Government.

xxxxxxxx

(13) (a) That the Lessee shall not transfer, whether in full or in part, or club or amalgamate tea-gardens without the formal sanction of the Collector;

Provided that except in cases where the provisions of the West Bengal Alienation of Land (Regulation) Act, 1960 (West Bengal Act XVI of 1960), apply, no such sanction shall be necessary for equitable mortgage of  a  tea-garden  with  a  Scheduled  Bank  by  the deposit of title deeds.  All such equitable mortgages shall,  however,  be  referred  to  the  Collector immediately.

(b) That the lease-hold interest shall be heritable.

(c) That  in  the  case  of  a  transfer  of  such lease-hold interest,  whether in full  or  in part,  the same shall be subject to the provision of any law for the time being in force and applicable thereto and also subject to prior consent of the Collector.

xxxxxxxx

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(16) (a) That the Lessee/Lessees shall be entitled to the renewal of the lease for a further period of thirty years and to successive renewals for similar periods, subject to the rules and the terms and conditions of this lease and the such other terms and conditions as  the  State  Government  may  from  time  to  time consider it necessary to impose and include in such renewed lease or leases and subject further to such rent  as  may  then  be  fixed,  provided  that  such additional  terms  and  conditions  shall  not  be inconsistent with the law regulating such lease and shall not have retrospective effect.”

12. From the aforementioned terms and conditions contained

in the lease deed of 1975, it is clear that the respondent lessee

shall  observe and conform to  the relevant  provisions of  the

West Bengal Estates Acquisition Rules for the time being in

force.  Clause 13(a) further provides that the lessee shall not

transfer  without  the  formal  sanction  of  the  Collector  and

Clause 13(c) provides that the transfer shall be subject to any

law  for  the  time  being  in  force  and  also  subject  to  prior

consent of the Collector.

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13. Clause 16(a) of the lease deed contains a renewal clause

according to which the lessee shall be entitled to the renewal

of  the  lease  for  a  further  period  of  thirty  years  and  to

successive renewals for similar periods, subject to the rules

and the terms and conditions of this lease and also such other

terms and conditions as the State Government may from time

to time consider it necessary to impose and include in such

renewed lease or leases and subject further to such rent as

may  then  be  fixed.  However,  such  additional  terms  and

conditions  shall  not  be inconsistent  with the law regulating

such lease and shall not have retrospective effect.

14. Indisputably,  during  the  subsistence  of  the  lease,  the

respondent  Darjeeling Dooars Plantations (Tea) Ltd. and the

Karala  Valley  Tea  Company  were  amalgamated  and  all  the

properties,  rights  and  interest  stood  transferred  to  the

respondent  Darjeeling  Dooars  Plantations  (Tea)  Ltd.  by  the

order passed by the Calcutta High Court on 31.10.1990 in a

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Company petition.  It is also not in dispute that the name of

the respondent  Darjeeling Dooars Plantations (Tea) Ltd. was

mutated by the order of the Collector dated 28.11.1991.

15.  Originally the lease was granted in the year 1924 for a

period of 30 years.   Before the expiry of the period of lease,

the West Bengal Estates Acquisition Act, 1953 came into force

in the State of West Bengal.  According to Section 4 of the Act,

all estates and the rights of every intermediary in each such

estate stood vested in the State free from all  encumbrances

with effect from the date of notification time to time issued by

the State Government.  Section 5 of the said Act deals with the

effect of the notification.  Section 6 of the said Act lays down

the provisions with regard to right of  intermediary to retain

certain lands.  Section 6 reads as under:

“6.  (1)  Notwithstanding  anything  contained  in sections 4 and 5, an intermediary shall, except in  the  cases  mentioned  in  the  proviso  to sub-section  (2)  but  subject  to  the  other provisions  of  that  sub-section,  be  entitled  to retain with effect from the date of vesting—

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(a) xxxxxxxxxx (b) xxxxxxxxxx (c) xxxxxxxxxx (d) xxxxxxxxxx (e) xxxxxxxxxx

(f)  subject  to  the provisions of  sub-section (3), land  comprised  in  tea  gardens  or  orchards or land used for the purpose of livestock breeding, poultry farming or dairy;

(g) xxxxxxxxxx xxxxxxxxxx

(2)  An  intermediary  who  is  entitled  to  retain possession  of  any  land  under  sub-section  (1) shall be deemed to hold such land directly under the State from the date of vesting as a tenant, subject to such terms and conditions as may be prescribed and subject to payment of such rent as may be determined under  the provisions of this Act and as entered in the record-of-rights finally published under Chapter V except that no rent  shall  be  payable  for  land  referred  to  in clause (h) or (i) :  

Provided  that  if  any  tank fishery  or  any  land comprised in a tea-garden, orchard, mill, factory or  workshop  was  held  immediately  before  the date of vesting under a lease, such lease shall be deemed  to  have  been  given  by  the  state Government on the same terms and conditions as immediately before such date subject to such modification  therein  as  the  State  Government may think fit to make.

(3) In the case of land comprised in a tea-garden, mill,  factory  or  workshop  the  intermediary,  or where the land is held under a lease, the lessee, shall be entitled to retain only so much of such land as, in the opinion of the State Government, is  required  for  the  tea-garden,  mill  factory  or

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workshop,  as  the  case  may  be,  and  a  person holding under to be an intermediary:  

Provided that  the State  Government  may,  if  it thinks  fit  so  to  do  after  reviewing  the circumstances  of  a  case  and  after  giving  the intermediary or the lessee, as the case may be, an opportunity of being heard, revise any order made by it under this sub-section specifying the land which the intermediary or the lessee shall be entitled to retain as being required by him for the tea-garden, mill, factory or workshop, as the case may be.  

Explanation:—The expression “land held under a lease”  includes any land held directly  under the State under a lease.

Exception:-In  the  case  of  land  allowed  to  be retained by an intermediary or lessee in respect of a tea-garden, such land may include any land comprised in a forest  if,  in  the opinion of  the State  Government,  the  land  comprised  in  a forest is required for the tea-garden.”

16. Reading relevant provisions of  Section 6, it  is manifest

that an intermediary, in possession of the land including tea

garden,  shall  be  entitled  to  retain subject  to  the  provisions

contained  in  sub-section  (3)  of  Section  6  of  the  said  Act.

Sub-section  3  very  clearly  provides  that  the  lessee  in

possession  of  tea  garden  etc.  shall  continue  and  shall  be

deemed to be an intermediary.   

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17.  Section  59  of  the  WBEA  Act  empowers  the  State

Government to frame rules for carrying out the purpose of the

Act.  Section 59 of the Act reads as under:

“Section 59 - Power to make rules

(1)  The State Government may, after previous publication,  make  rules  for  carrying  out  the purposes of this Act.

(2)  In particular,  and without  prejudice  to  the generality  of  the  foregoing  power,  such  rules may provide for all or any of the matters which, under any provision of this Act, are required to be prescribed or to be provided for by rules.”

18. In exercise of the power conferred by Section 59 of the

Act,  the  West  Bengal  Estates  Acquisition  Rules,  1954  was

framed and the same was published in the official Gazette vide

Notification dated 28.5.1954.  Rule 4 of the said Rules  inter

alia provides that the land retained by an intermediary under

the provisions of sub-section (1) of Section 6 shall be held by

him  from the  date  of  vesting  on  the  terms  and  conditions

specified in the Rules.  So far as the tea garden is concerned,

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it  has  been specifically  provided that  an intermediary  shall

hold  such  land  on  the  terms  and  conditions  set  out  in

Schedule  F  appended  to  the  Rules.   Therefore,  for  better

appreciation, Schedule F and the Form-1 for the purpose of

granting lease for tea garden have been reproduced here.

“SCHEDULE F [Rule 4]

1. Land comprised in a tea garden retained by an intermediary under sub-section (1),  read with  sub-section  (3),  of  section  6  shall  be deemed to be held directly  under  the State from the date of vesting as a tenant [until a lease is granted in Form I appended to this schedule,  on such terms and conditions  as may  be  specified  by  the  Collector  in  a summary  settlement,  and  thereafter,  on  a lease  being  granted in Form I  appended  to this  schedule,  on the terms and conditions specified  in  such  lease].   There  shall  be  a lease  in  Form  I  in  respect  of  each  such intermediary,  and  the  same  shall  be registered and numbered in the office of the Collector.

1A     xxxxxxxxxxxxxxxxxxxx

1B xxxxxxxxxxxxxxxxxxxx

2. The first lease shall be given from the date of the order under sub-section (3) of section 6 or from the date of the determination of the rent under section 42, whichever is later.”

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19. By Notification dated 1.6.1994 issued by the Government

of  West  Bengal,  Land  &  Land  Reforms  Department,  an

amendment has been brought in Schedule F to the said Rules

discussed  hereinabove.   By  the  said  notification,  two

sub-paragraphs  being  1A  and  1B  were  inserted,  which  are

reproduced hereunder:

“1A. When  the  lease  of  a  tea  garden  is determined and the tea garden is leased afresh to a new lessee, the later shall be liable to pay salami at the rate of Rs.15,000/- per hectare of the land leased out.

1B. In  case  of  a  transfer  of  the  leasehold interest,  except  by  way  of  inheritance,  the transferee  shall  not  be  liable  to  pay  salami during the unexpired period of the lease.  On the expiry of the transferred lease, he shall be liable to  pay  salami at  the  rate  of  Rs.15,000/-  per hectare of the land leased out before the lease is further renewed.”

20. In Clause (13), sub-clause (dd) was also inserted, which

is quoted hereinbelow:

“(dd)  That  the  transferee,  other  than  by inheritance,  shall  be  required  to  enter  into  a fresh lease on payment of salami at the rate laid

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down  in  paragraph  1B  of  Schedule  F  within three months of expiry of the unexpired period of lease.”

21. It  is  therefore  manifest  that  when  a  lease  of  the  tea

garden is determined by efflux of time and a lease is granted

afresh to new lessee, the latter shall be liable to pay salami at

the  rate  of  Rs.15,000/-  per  hectare of  the  land leased out.

Clause 1B also provides that the transferee shall not be liable

to pay salami during the unexpired period, but on the expiry of

the  lease,  he  shall  be  liable  to  pay  salami at  the  rate  of

Rs.15,000/- per hectare of the land leased out before the lease

is further renewed.

22. Admittedly,  the  lease  of  1975,  which  became  effective

from 1968, got expired in the year 1998.  The respondent then

approached  the  Government  for  renewal  of  the  lease.   The

Collector prepared a lease deed incorporating the terms and

conditions contained in the earlier lease and referred it to the

Government for final approval.  The request of the respondent

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for grant of lease was considered by the Government and by

order as contained in letter dated 5.10.2001, addressed to the

District Magistrate & Collector, Jalpaiguri, informed that the

Government will accord post facto approval to the renewal of

the lease for a further period of 30 years on payment of salami

of  Rs.15,000/-  per  hectare.   The  letter  dated  5.10.2001  is

reproduced hereunder:

“Government of West Bengal Land and Land Revenue Department

Land Reforms Branch L.R. Bench

No.4051-LR/3T-69/04

Dated, Kolkata, the 5th October, 2001

From: The Deputy Secretary to the Govt. of West Bengal

To:  The  District  Magistrate  &  Collector, Jalpaiguri, P.O. & Dist. Jalpaiguri.

Sub:  Proposal  for  post-factor  approval  to  the renewal  of  lease  of  the  land  comprised  in Zurantee Tea Garden in Jalpaiguri District.

The undersigned is directed to refer to the above  subject  and  to  say  that  post-facto approval  to  the  renewal  of  lease  of  the  land comprised in Zurantee Tea Garden for the period of 30 years in favour of M/s. Darjeeling Dooars Plantation  (Tea)  Limited  will  be  accorded  after salami @  Rs.15,000/-  per  hectare  and  other dues,  if  any,  are  realized  from  the  concerned

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Company.   Till  such  post-facto  approval  is accorded, renewal accorded by him will remain inoperative.

He is, therefore, requested to realize all the dues  and  report  compliance  thereof  to  the Department with the certificate that there is no arrear dues from the concerned companies so as to enable the Govt. in the Land & Land Reforms Department  to  accord  necessary  post-facto approval as so proposed by him.

He  is  also  requested  to  furnish  the  copy  of relevant documents particularly the copy of the High  Court’s  order  and  copy  of  certificate  of incorporation  issued  by  the  Registrar  of Companies  based on which Mutation case no. IV-5 of 1991-92 was finalized and mutation was allowed.

Sd/-

Deputy Secretary to the Govt. of West Bengal”

23. In  pursuance  to  the  decision  taken  by  the  State

Government, an order was passed by the Collector, Jalpaiguri

dated  29.11.2002  directing  the  respondent  to  deposit

Rs.15,000/-  per  hectare  as  salami at  the  time  of  renewal

before  according  approval  of  the  Land  &  Land  Revenue

Department.  The order was communicated to the respondent

and the same came to be challenged before the Land Reforms

and Tenancy Tribunal.  The respondent sought a declaration

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that the Notification dated 1.6.1994 and amendments of the

Rules  in  Schedule  F  and  Form  1  thereto  are  illegal  and

unconstitutional.   The  said  application  was  rejected  by  the

Tribunal.  However, by the impugned order, the High Court

allowed  the  writ  petition  and  quashed  the  order  of  the

Tribunal.

24. We  have  heard  Mr.  Rakesh  Dwivedi,  learned  senior

counsel  appearing  for  the  appellant-State  and  Mr.  A.K.

Ganguli,  learned  senior  counsel  appearing  for  the

respondent-Company in Civil Appeal No.2549 of 2006.   

25. Mr. Dwivedi assailed the order of the High Court as being

contrary  to  the  facts  of  the  case  and  mis-appreciating  the

status of the respondent by recognizing it as a lessee and not

as a transferee.  Mr. Dwivedi submitted that Clause 1A and

1B,  as  inserted  by  the  amendment,  will  apply  on  its  own

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course as even the inclusion of these clauses in the lease deed

is not necessary.   According to the learned counsel, Clause

16(a) was already there in the previous lease and as per the

said clause additional conditions to the subsequent lease can

be included.  Mr. Dwivedi submitted that post facto sanction

by the  State  Government  is  a  pre-condition  for  payment  of

salami and  for  that  reason the  lease  deed executed  by  the

respondent was signed by the Collector and forwarded to the

State  Government  for  sanction.   According  to  Mr.  Dwivedi,

renewal of lease is a fresh one and lessor, namely the State, is

entitled to include additional terms and conditions in the said

document of lease.

26. Mr.  A.K. Ganguli,  learned senior counsel  appearing for

the respondent, on the other hand contended that the lease

granted  to  the  predecessor-in-interest  of  the  respondent  is

statutory  lease  governed  by  the  Act  and  the  Rules  made

thereunder and unless and until the amendments brought in

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by the notification dated 1.6.1994 and incorporated in Form 1,

salami cannot be realised.  According to the learned counsel,

the respondent-Company came into existence much before the

transfer of the leasehold interest, by virtue of amalgamation

and  the  order  passed  by  the  High  Court  in  the  Company

Petition.  According to Mr. Ganguli, the respondent is in the

nature  of  joint  venture  Company.   Learned  senior  counsel

relied upon decision of this Court in the case of New Horizons

Ltd. vs. Union of India (1995) 1 SCC 478 and in the case of

State of U.P. vs. Lalji Tandon, (2004) 1 SCC 1.

27. Perusal of the impugned order passed by the High Court

would show that although the High Court took notice of clause

16(a)  of  the  lease  deed  and  amendment  brought  in  the

Schedule F and Form 1 of the Rules it came to the following

conclusion:

“22.1.  These  terms  of  renewal  are  clear  and unambiguous  and  these  are  terms  exactly, which is provided in Schedule "F" Form-I of the WBEA  Rules.  In  terms  of  the  conditions

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contained  in  Clause  16(a),  the  State Government/lessor  was  entitled  to  incorporate additional terms and conditions consistent with the  law  regulating  the  lease  with  prospective effect  in  the  renewed  lease.  This  lease  was granted in terms of Rule 4 of the WBEA Rules in terms of  Schedule  "F"  in  Form-I.  The  State  is entitled only to incorporate additional conditions in  the  renewed  lease  with  prospective  effect. Therefore, the amendment, if any, incorporated in  Schedule  "F"  by  reason  of  the  amendment effective  from 1st  of  June,  1994 would not  be effective  in  respect  of  unexpired  period  of  the lease  to  which  the  Darjeeling  Dooars  had stepped into. Therefore, under Clause 16(a) read with  Schedule  "F",  Darjeeling  Dooars  was entitled  to  renewal  of  the  lease  on  the  same terms and conditions. The amendment brought about could not be given retrospective effect to affect the right of the lessee/transferee stepping into the shoes of the transferor-lessee to obtain further renewal of the lease for further period of 30 years and to successive renewals for similar periods. The only liberty the State Government had under the said clause is that it can impose and include in the said renewed lease additional terms and conditions not inconsistent with Rule 4 Schedule "F" and Form-I of the WBEA Rules without retrospective effect.

22.2. Therefore, the amendment brought about in  Schedule  "F"  could  be  incorporated  in  the renewed lease and was so rightly incorporated in the  1998  lease.  As  such  the  conditions  so incorporated became part of the renewed lease and would govern the terms and conditions of the  renewed  lease  and  that  too  prospectively. These  additional  terms  and  conditions incorporated  in  the  renewed  lease  became effective  after  the  lease  was  renewed,  namely when the right to renew the lease was exercised and upon such exercise the right came to an end and the renewal of the lease being a fresh lease,

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these terms cannot operate to affect a situation prior  to  the  renewal  of  the  lease.  In  terms of these  additional  conditions,  the  salami is payable in consideration of the renewal after the expiry  of  the  renewed  lease  containing  the terms. A term, which was not in existence in the lease sought to be renewed within the scope of Clause 16(a), could not govern the right of the lessee to obtain renewal of the right or the State to impose conditions for renewal on the basis of Clause 16(a) of the 1975 lease, as was held in Delhi  Development  Authority  v.  Durga  Chand Kaushish [1974] 1 SCR 535 .

xxxxxxxxxx

22.4. The amendment also does not provide that the  amended clauses  would have  retrospective operation. In any event, the terms of the lease cannot  be  substituted  even  by  legislation.  No vested right, particularly, in respect of fiscal or revenue matters already accrued could be taken away through legislation; neither any legislation in  that  respect  could  be  retrospective  in operation.

Conclusion:

23. In these circumstances, the additional terms contained  in  the  renewed  lease  would  be effective at the time of renewal of the renewed lease  entitling  the  State  of  demand  salami in terms of Clause 1B from the transferee if there is any transfer. However, salami can be demanded by  the  State  under  Clause  1A  upon determination  of  the  lease  from the  person  to whom the fresh lease is granted after the 1994 Amendment of the WBEA Rules even if Clause 1A  was  not  incorporated  in  the  lease determined.

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23.1. In these circumstances, the Government is not  entitled  to  demand  salami in  terms  of Clauses 1A or 1B incorporated in the renewed lease  as  a  consideration for  the  1998 renewal from the Darjeeling Dooars. Such a demand is inconsistent with the law regulating such lease and cannot be retrospective in effect.”

28. We  have  given  our  anxious  consideration  to  the

reasoning assigned by the High Court while arriving at such

conclusion.  In our view, the High Court has misconstrued

and misinterpreted the relevant provisions contained in the

Rules viz-a-viz the condition of renewal as contained in clause

16(a) of the lease deed.  The High Court has committed error

of law in holding that the amendment brought about could

not  be  given  retrospective  effect  to  affect  the  right  of  the

lessee/transferee  stepping  into  the  shoes  of  the

transferee/lessee  to  obtain  further  renewal  of  lease  for  a

further  period  of  30  years  and  to  successive  renewals  for

similar  periods.   The  High  Court  is  not  correct  in  law  in

holding  that  the  amended  clause  would  have  retrospective

operation.

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29. Indisputably, the renewal of lease is a fresh grant where

the principal lease executed between the parties containing a

clause that  the lease shall  have to be renewed by giving a

fresh grant in accordance with the said clause.  In the instant

case, as per clause 16(a) of the earlier lease deed, the lease is

to be renewed for a further period of 30 years but subject to

the rules and the terms and conditions of the lease and also

such other  terms and conditions  as  the  State  Government

may from time to time consider it necessary to impose and

include in such renewed lease.  Clause 16(a) further provides

that additional terms and conditions that may be considered

necessary by the State Government be included but the same

shall  not be inconsistent  with the law renewing such lease

and shall not have retrospective effect.  

30. As noticed above, the State Government by notification

dated  1.6.1994  brought  amendment  in  the  Rules  by

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incorporating two more conditions i.e. paragraph 1A and 1B.

As per the additional condition, in case of fresh lease granted

by the State in respect of tea garden, the lessee shall be liable

to pay  salami at the rate of Rs. 15,000/- per hectare of the

land leased out.  However, paragraph 1-B made it clear that

in case of transfer of leasehold interest, the transferee shall

not  be liable  to pay  salami during the unexpired period of

lease, but after the expiry of the existing period of lease the

transferee  shall  be  liable  to  pay  salami at  the  rate  of  Rs.

15,000/-  per  hectare  before  the  lease  is  further  renewed.   

31. Admittedly, before the expiry of the lease in question in

1998, the respondent/transferee stepped into the shoes of the

original  lessee  in  the  year  1990.   In  1994,  by  notification

dated 1.6.1994, an amendment was brought in Schedule F of

the Rules, as discussed hereinabove, in terms of clause I-B.

Therefore,  the respondent shall  not  be liable to pay  salami

during the unexpired period of lease up to 1998.  The State

Government has rightly not made any claim for salami for the

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unexpired period of lease, but for the fresh renewal of lease

after 1998 which is a fresh grant.  The demand of salami by

State Government for according sanction for renewal of lease

cannot and shall not by any stretch of imagination be held to

be retrospective.   

32.  In the case of State of U.P. vs. Lalji Tandon, (2004) 1

SCC 1, this Court while considering the renewal clause in the

lease deed observed:-

“13. In  India,  a  lease  may  be  in  perpetuity. Neither  the  Transfer  of  Property  Act  nor  the general law abhors a lease in perpetuity. (Mulla on the Transfer of Property Act, 9th Edn., 1999, p. 1011.)  Where a covenant for renewal exists, its exercise is, of course, a unilateral act of the lessee,  and  the  consent  of  the  lessor  is unnecessary. (Baker v. Merckel, also Mulla, ibid., p.1204.)  Where  the  principal  lease  executed between  the  parties  containing  a  covenant  for renewal, is renewed in accordance with the said covenant, whether the renewed lease shall also contain  similar  clause for  renewal  depends  on the facts and circumstances of each case, regard being  had  to  the  intention  of  the  parties  as displayed  in  the  original  covenant  for  renewal and the surrounding circumstances. There is a difference  between  an  extension  of  lease in

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accordance  with  the  covenant  in  that  regard contained in the principal lease and renewal of lease, again in accordance with the covenant for renewal  contained in the original  lease.  In the case of extension it is not necessary to have a fresh deed of lease executed, as the extension of lease  for  the  term  agreed  upon  shall  be  a necessary  consequence  of  the  clause  for extension.  However,  option  for  renewal consistently with the covenant for renewal has to  be  exercised  consistently  with  the  terms thereof  and, if  exercised,  a fresh deed of lease shall  have to be executed between the parties. Failing  the execution of  a  fresh  deed  of  lease, another  lease  for  a  fixed  term shall  not  come into existence though the principal lease in spite of the expiry  of the term thereof may continue by  holding  over  for  year  by  year  or  month by month, as the case may be.”

33. In the case of Gajraj Singh & ors. vs. State Transport

Appellate Tribunal & ors.,  (1997) 1 SCC 650, this Court

while  considering  the  term  renewal  of  lease  or  licence

contained in document, observed that “grant of renewal is a

fresh grant though it breathes life into the operation of the

previous lease or licence granted as per existing appropriate

provisions of the Act, rules or orders or acts intra vires or as

per the law in operation as on the date of renewal”.

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34. In the case of  M.C. Mehta vs. Union of India & ors.,

(2004)  12  SCC  118,  a  Division  Bench  of  this  Court  was

considering the question as to the effect of notification in such

case where the lessee claims renewal of mining lease.  Some

of the leases were granted for extraction of minerals.  In the

mean time,  the notification dated 27.1.1994 was issued by

Ministry of Environment and Forest, Government of India in

exercise of power conferred by Environment (Protection) Act,

1986 putting a restriction to the grant of mining lease without

the clearance of the State Government in accordance with the

procedure  specified  in  the  notification.   Rejecting  the

contention made by the lessee this Court observed:-

“77. We are unable to accept the contention that the  notification  dated  27-1-1994  would  not apply to leases which come up for consideration for  renewal  after  issue of  the  notification.  The notification mandates that the mining operation shall  not  be  undertaken  in  any  part  of  India unless environmental  clearance by the Central Government  has been accorded.  The clearance under the notification is valid for a period of five years. In none of the leases the requirements of the notification were complied with either at the stage of initial grant of the mining lease or at the stage of renewal. Some of the leases were fresh leases  granted  after  issue  of  the  notification.

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Some  were  cases  of  renewal.  No  mining operation  can  commence  without  obtaining environmental  impact  assessment  in  terms  of the notification.”

35. Considering  the  entire  facts  of  the  case  and  the  law

discussed hereinabove, we are of the definite opinion that the

respondent Darjeeling Dooars Plantations (Tea) Ltd. is liable to

pay salami which is one of the conditions of the Rules for the

purpose  of  renewal  of  lease.   The  demand  made  by  the

Collector is fully justified.  The impugned order passed by the

High Court, therefore, cannot be sustained in law.

Civil Appeal No.2548 of 2006

(State of West Bengal and others vs. Calcutta Mineral Supply Co. Pvt. Ltd. and another)

36. We  have  heard  Mr.  Rakesh  Dwivedi,  learned  senior

counsel  appearing  for  the  appellant-State  and  also  Mr.

Jaideep  Gupta,  learned  senior  counsel  appearing  for  the

respondent-company.  In  this  case,  indisputably  the

respondent was in possession of  the land measuring about

4.54  acres  comprised  in  a  factory  or  mill  together  with

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structures when WBEA Act came into force in 1954.  After the

said Act of 1953 came into effect, the company was allowed to

retain  all  the  lands  comprised  in  the  factory  by  the

respondent by reason of Section 6(1)(g) read with Section 6(3)

of the Act as the State Government was of the opinion that

the Company required all  the lands for  the purpose of  the

factory.  It is also not in dispute that at all point of time the

respondent-company was holding the land of factory within

the ceiling limit as provided under the WBEA Act and West

Bengal Land Reforms Act.

37. Mr.  Gupta,  learned  senior  counsel,  rightly  submitted

that after coming into effect of the aforesaid Act no order was

passed  by  the  concerned  authority  against  the  respondent

since the land held by it was well within the ceiling limit.  The

High  Court,  while  considering  the  case  of  the  respondent,

came to the following conclusion:

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“28. Once the WBLR Act becomes effective and a person becomes a raiyat within the meaning of Section  4  thereof,  he  cannot  have  dual characteristic, one under the WBEA Act and the other  under  the  WBLR  Act.  It  is  not  at  the convenience  or  whims of  the State  that  it  will resort to the provisions of the one or the other Act according to its own convenience. The law is governed  by  the  statute.  There  is  no  scope  of arbitrariness or whims or caprice in the exercise of power or discretion, left with the State to treat a  raiyat  in  a  manner  that  suits  the  State according  to  its  own  convenience.  It  is  only Section  14Z,  which  governs  the  field  and  to which the State can resort to. The whole exercise of the power under the WBEA Act in this case is wholly without jurisdiction and the exercise can no  more  encroach  upon the  field  governed  by Section 14Z of the WBLR Act.

28.1. In this case, admittedly, the writ petitioner held  land  comprised  in  mill  and  factory measuring  about  4.54  acres,  which  is  well within the ceiling both under the WBEA Act and WBLR  Act.  Therefore,  retention  of  the  land under  Section  6(1)  could  not  be  subjected  to Section 6(3) of the WBEA Act, which applies in respect  of  land  held  in  excess  of  the  ceiling. Similarly,  Section  14Z(2)  of  the  WBLR  Act applies to land held by a raiyat in excess of the ceiling. Once the writ petitioner became a raiyat by virtue of  operation of  Section 3A read with Section  4  along  with  the  amendment  of  the definition of land in Section 2(7) of the WBLR Act with heritable and transferable right in respect of land held by him within the ceiling, there is no scope for application of Section 14Z(2) of that Act.

Order:

29. Therefore,  the order passed by the Deputy Secretary/Special  Secretary  on  20th  of  July,

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2001 (pp. 65-78) upholding the notice and the notice  dated 10th of  August,  2001 (pp.  76-77) issued  by  the  Sub-Divisional  Land  and  Land Reforms  Officer,  Barrackpore,  for  enquiry  and possession pursuant thereto and the order dated 18th  January,  2001  passed  by  the  learned Tribunal  affirming  the  order  passed  by  the Deputy  Secretary  being  subject-matter  of  this writ petition cannot be sustained and are hereby quashed.  Let  a  writ  of  certiorari  do  issue accordingly.”

38. Having regard to the facts of the case of the respondent

and also regard being had to the fact that the respondent at

all  point  of  time held the land within the ceiling limit,  the

High  Court  rightly  set  aside  order  dated  29th July,  2011

passed by the Special Secretary upholding the notice issued

by  the  Sub-Divisional,  Land  and  Land  Reforms  Officer.

Therefore,  we do not  find  any  reason to  interfere  with  the

order passed by the High Court so far this case is concerned.

39. For the reasons aforesaid, Civil Appeal No.2549 of 2006

(Collector,  Jalpaiguri  and  another  vs.   Darjeeling  Dooars

Plantations  (Tea)  Ltd.  and  another)  is  allowed  and  the

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judgment and order passed by the High Court, in W.P.L.R.T.

No.288 of 2005, is set aside.  Whereas Civil Appeal No.2548 of

2006 (State of  West Bengal and others vs.  Calcutta Mineral

Supply Co. Pvt. Ltd. and another) is dismissed. However, there

shall be no order as to costs.

…………………………….J. (M.Y. Eqbal)

…………………………….J. (Amitava Roy)

New Delhi May 06, 2015

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