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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 3107-3108    OF 2012 (Arising out of SLP(C) Nos. 36724-36725 of 2009)

Saroj Screens Pvt. Ltd. … Appellant  

versus

Ghanshyam and others … Respondents

J U D G M E N T

G.S. Singhvi, J.

1. Leave granted.

2. These appeals are directed against judgment dated 16.10.2009 of the  

Bombay  High  Court,  Nagpur  Bench  whereby  the  writ  petitions  filed  by  

respondent nos. 1 and 2 were partly allowed, Resolution dated 28.8.1991  

passed  by  Municipal  Corporation  of  the  City  of  Nagpur  (for  short,  ‘the  

Corporation’) for renewal of lease in favour of the appellant in respect of

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Plot  No.5,  Circle  No.19/27,  Division  I,  Old  Sarai  Road,  Geeta  Ground  

Layout, Nagpur as also sanction accorded by the State Government under  

Section 70(5)  of the City of Nagpur Corporation Act, 1948 (for short, ‘the  

Act’)  were  quashed  and  a  direction  was  issued  to  Civil  Judge  (Senior  

Division), Nagpur to decide Special Civil Suit No. 1135 of 1993 latest by  

31.12.2010.

FACTS:

3. On an application made by Gopaldas Mohta (father of respondent No.  

1 – Ghanshyam Mohta and father-in-law of respondent No. 2 – Smt. Kamla  

Devi), Municipal Committee of Nagpur (for short, ‘the Committee’) passed  

resolution dated 17.3.1944 for grant of lease to him in respect of the plot  

described  herein  above  for  a  period  of  30  years.  In  furtherance  of  that  

resolution, lease deed dated 28.10.1944 was executed in favour of Gopaldas  

Mohta.  The tenure of  lease commenced from 17.3.1944. For the sake of  

convenient reference, Clauses 6 and 8 of the lease deed are extracted below:

“6. The lessee shall upon every assignment of the said land  or any part thereof within a calendar month thereafter deliver to  the lessor or to such person as he may appoint in this behalf a  notice  of  such  assignment  putting  forth  the  names  and  description of the parties thereto and the particulars and effect  thereof.

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8. The Municipal  Committee i.e.  the lessor  will  have the  option to retake structure at end of the term of 30 years hereby  granted by paying the then market value of the structure or to  renew the lease on the revised ground rent, fair and equitable,  for a further term of 30 years or more.

Provided also that every such renewed lease of the land shall  contain such of the covenants provisions and conditions in these  presents  contained  as  shall  be  applicable  and  shall  always  contain a covenant for further renewal of the lease.”

3.1 After  about  3  years,  Gopaldas  Mohta  leased  out  the  plot  to  the  

appellant  for  a  period  of  27  years  (from 28.3.1947  to  16.3.1974).   The  

relevant  portions  of  deed  dated  10.9.1947  executed  between  Gopaldas  

Mohta and the appellant read as under:

“THIS DEED OF LEASE made on the 10th day of September,  1947,  between  DIWAN  BAHADUR  Seth  Gopaldas  Mohta,  resident of Akola (hereinafter called the Lessor)  of  the ONE  PART, and Messrs Saroj Screens Ltd., Amraoti, a joint stock  company with limited liability,  represented by Mr. Anandrao  son  of  Yadararo,  Managing  Director,  resident  of  Amraoti,  Taluq and District Amraoti, (hereinafter called the Lessees) of  the SECOND PART.

WITNESSETH AS FOLLOWS:

1. The Lessor holds and is in possession of a plot of land,  situated  in  the  locality  popularly  known  as  “The  Geeta  Ground”, in Sitabuldi of Nagpur city in the Central Provinces  and  more  particularly  described  in  the  scheduled  statement  herewith below, which he holds under a lease dated 17th March,  1944, granted by the Municipal Committee Nagpur, and on this  plot, the Lessor has constructed a plinth for construction of a  Cinema Theatre, as per plans, sanctioned and approved by the  

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said  Municipal  Committee.   Over  this  plot,  certain  building  materials,  such  as  sand,  stones,  metal  and  other  iron  and  wooden  material  etc.,  belonging  to  the  Lessor,  have  been  collected and are lying.  The Lessor hereby lessee the said plot  including the plinth and above mentioned materials which have  already been delivered into the possession of the Lessees  by  the  Lessor),  to  the  Lessees,  for  a  period  commencing from 28.3.1947 till 16th March, 1974,  which is the entire unexpired period of the Lease  which  the  Lessor  holds  under  the  Municipal  Committee, Nagpur.  

The main lease in favour of the lessor, contains a  clause for renewal under which the lessor shall be  entitled to have the lease renewed in his favour,  for a further period on the expiry of the present  lease. This right of the lessor, is however, retained  by the lessor, for his own benefit and the lessees  shall  have  no  claim  to  the  interest  thereby  created.

PROVIDED HOWEVER,  if  the  lessees  acquire  the  interests of the lessor,  as provided in Clause (5)  below, the lessees shall be entitled to all the rights  and interest of the lessor under the said clause for  renewal,  together  with  all  other  interests  which  the  lessor  may  have  under  the  lease  before  mentioned, dated 17th March, 1944 including the  right of renewal, therein mentioned.

5. The lessees shall  have the option to pay to  the lessor a sum of Rs.  90,000/-  (Rupees Ninety  Thousand only)  at  any time during the first  five  years of the lease and to purchase all the rights of  the  Lessor  under  said  Head  Lease  from  the  Municipal  Committee,  Nagpur,  together  with  his  rights over the plinth and the material and on this  amount  being  paid  as  per  this  conditions,  the  lessor  shall  be  bound  to  execute  the  necessary  assignment  or  other  assurance  in  favour  of  the  

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lessees at the cost and expenses of the lessees.  The lessees shall have also the option to acquire  the said interest from the lessor at any time, on  payment of the same price, namely Rs. 90,000/-  only during the last year before the expiry of the  lease by afflux of time.

10. On  expiry  of  the  lease  in  due  course,  the  lessees  shall  hand  over  the  possession  of  the  premises  leased  together  with  the  structures  thereon  to  the  lessor  who  shall  thereupon  be  entitled  to  take  over  the  structure  after  valuing  them  in  the  manner  hereinbefore  provided.   In  case,  he  pays  the  value  of  that  part  of  the  structure which  the  lessees  have constructed  to  the  lessees,  then  the  entire  structure  will  thereafter belong to the lessor. In case, the lessor  does not elect to take over the materials and in  case,  the  lessees  fail  to  exercise  the  option  of  acquiring the leased premises from the lessor as  provided,  then  in  that  event,  the  lessees  may  remove that part of the structure which he may  have  constructed  at  his  cost  within  reasonable  time of two months and on his failure to do so, the  structure shall thereafter belong to the Lessor and  the lessees will have no right to the same or price  thereof.”

3.2 In 1959, there was a partition in the family of Gopaldas Mohta and the  

plot in question came to the share of his wife Smt. Gangabai. She assigned  

the same to Parmanand Kisandas Mundhada of Calcutta by executing deed  

dated 12.8.1960. Thereafter, the name of Parmanand Mundhada was entered  

in the records of the Committee along with that of Smt. Gangabai.  After 12  

years,  the  appellant  sent  letter  dated  15.1.1973 to  Parmanand Mundhada  

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indicating  therein  that  it  was  ready  to  pay  Rs.90,000/-  and purchase  the  

interest  created  in  favour  of  Gopaldas  Mohta  vide  lease  deed  dated  

28.10.1944.   The  appellant  also  requested  Parmanand  Mundhada  to  

approach the Corporation, which had succeeded the Committee, for renewal  

of the lease after 16.3.1974.

3.3 Parmanand  Mundhada  submitted  application  dated  7.3.1974  to  the  

Corporation for renewal of lease for a period of 30 years.  However, without  

waiting for the Corporation’s response, the appellant filed Special Civil Suit  

No.96 of 1974 against Parmanand Mundhada, Gopaldas Mohta, Gangabai  

and  the  Corporation  for  the  specific  performance  of  agreement  dated  

10.9.1947 executed by Gopaldas Mohta.  During the pendency of the suit,  

Parmanand Mundhada died and his legal representatives were brought on  

record.  

3.4 The suit  filed by the appellant  was decreed by Civil  Judge,  Senior  

Division, Nagpur (hereinafter referred to as, ‘the trial Court’) vide judgment  

dated  28.4.1980  but  the  same  was  reversed  by  the  High  Court  in  First  

Appeal Nos. 95 of 1980 and 96 of 1980 filed by the heirs of Parmanand  

Mundhada  and  respondent  No.2  and  the  Corporation  respectively.  The  

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relevant  portions  of  the  High  Court’s  judgment  dated  25.7.1991  are  

extracted below:

“20.   To  this  letter  (Exh.  98)  a  reminder  was  sent  on  15th  February 1974 after a gap of one year. That letter is Exh. 99.  That letter is addressed to defendant no. 1 Parmanand by the  Counsel of the plaintiff. It makes an interest reading. It is hence  extracted as a whole. It reads as under:- Dear Sir,

Under instructions of my clients M/s Saroj Screens Pvt.  Ltd.,  I  have  to  invite  your  attention  to  their  registered  letter dated 15.1.1973 received by your on 19.1.1973. My  client has not received any reply so far.

2.Please let me know whether you have applied to the Municipal  Corporation, Nagpur for renewal of the lessor whether you want  to apply for renewal of the lease. If you have applied, what is  the result of your application.

3.My client has been ever ready and willing to perform his part  of the contract under the Indenture dated 10.9.1947 with Diwan  Bahadur Seth Gopaldas Mohta, by which you are bound.

4.Please note that if you do not sent any satisfactory reply within  ten days of the receipt of this letter, my client will take it that  you do not want to get the lease dated 28.10.1944 renewed and  to perform your part of the contract  and  thereby you  have  committed  breach thereof.  In that event my client will be free  to take such steps as he may be advised and in the event of  litigation you will  be held liable for  costs  and consequences.  Please take notice.

Yours faithfully, Sd/-

Advocate Counsel for M/s. Saroj Screens Pvt. Ltd.

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The   letter is self explanatory. It clearly calls upon    the defendant no. 1 to get the legal renewed and  on failure to perform that part of contract it would  result  in  breach  of  the  contract  of  his  part.  Therefore, the readiness or willingness on the part  of the plaintiff was made subject to renewal of the  lease which condition was never agreed upon. This  is more glaring when we peruse the reliefs claimed  in  the  plaint.  In  prayer  clause  (a)  the  plaintiff  claimed  a  decree  that  the  defendant  no.  1  do  obtain from the defendant no. 2 a renewed lease  of the original (Exh. 120) on rent which is fair and  equitable, and in clause (aa) the relief claimed was  that  on  deposit  of  Rs.  79,000/-  in  Court  the  defendant  no.  1  do  execute  in  favour  of  the  plaintiff  a  deed  of  transfer  of  all  rights  in  the  renewed lease granted to him by the defendant  no.  2.  The  pleadings  and  the  evidence  are  restricted  to  the  allegations  made  in  the  two  letters Exh. 98 and 99 only.

21. Therefore, no doubt is left in our mind that the  plaintiff came forward seeking implementation of a  different  contract  than  the  one  agreed  between  the parties. Apparently the plaintiff had no desire  to pay the amount of Rs.90,000/- till such time the  lease is renewed. There was neither readiness or  willingness  on  the  part  of  the  plaintiff  to  implement  the  contract.  We  hence  answer  the  point at issue in the negative. The learned Court  below had completely misdirected itself in coming  to  a  contrary  conclusion  not  warranted  by  the  facts on record.”

(emphasis added)

3.5 During the pendency of the suit filed by the appellant, the Corporation  

passed Resolution No.162 dated 29.10.1975 for renewal of lease in favour of  

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Parmanand Mundhada for a period of 30 years subject to the condition of  

payment of ground rent at the rate of Rs.13,120/- per annum and penalty of  

Rs.3,000/-  for  breach  of  the  conditions  embodied  in  lease  deed  dated  

28.10.1944.   The  relevant  portions  of  Resolution  dated  29.10.1975  are  

reproduced below:  

“Resolution  No.  162:  The  term  of  the  30  years  lease  of  plot  no.  5  situated  on  Geeta  Ground,  Sitabuldi, where upon Anand Talkies is situate has  expired on 16.3.1974. The present owner of that  plot  viz  Shri  Parmananddas Kisandas Mundhada,  resident  of  55/58  Isra  Street,  Calcutta,  having  made an application on 7.3.1974 for  renewal  or  lease  for  further  30  years,  the  house  took  into  consideration the said request.

xxx xxx

xxx

With  regard  to  the  subject  under  consideration,  the Hon'ble Members have made a request  that  the  House  should  give  information  to  them  regarding the notes made by way of amendment  by the Municipal Commissioner.

The   Hon'ble   Mayor   has   suggested   that  the   Municipal Commissioner   should  clarify  about  the  amended  notes. Accordingly   the   Hon'ble   Municipal   Commissioner   made clarification  about  his  notes  made  on  17.10.1975  in  details.

xxx xxx xxx

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After that discussion, as mentioned in the notes of  the  Hon'ble  Municipal  Commissioner  dated  17.10.1975,  the  House  has  taken  unanimous  decision to renew the lease on other conditions for  further 30 years by charging per year Rs. 13,120/-  as  ground  rent,  and  the  previous  lease  having  committee  breach  of  two  minor  conditions,  by  penalizing him Rs.  1500/-  for  each  breach,  total  Rs. 3000/-, as shown in the concerned file.

The term of 30 years lease of Municipal Plot No. 5 situate in  Geeta  Ground,  Sitabuldi,  on which Anand Talkies  is  situate,  having expire on 16.3.1974 and the present owner of the plot  Parmananddas  having  his  residence  at  55/58  Isra  Street,  Calcutta having made an application for further renewal of the  plot for further 30 years, as also considering the notes prepared  by the Hon'ble Municipal Commissioner dated 17.10.1975 for  the  case  has  been  renewed  for  further  30  'sanctioned',  'sanctioned', on the following conditions.

1)Considering  the  fact  that  the  present  market  price  in  comparison to old price, which is 10 times more, it being proper  to enhance the ground rent in ratio by 10 times, it was suggested  that the ground rent of that plot should be fixed at Rs. 13120/-  per annum.

2)The previous lessee of the lease deed have committed breach  of two conditions, Rs.1500/- for each breach, total Rs. 3000/- should be recovered by way of fine from him.

3)Other conditions will be as before.”

3.6 Parmanand Mundhada is said to have filed an appeal under Section  

397(3)  read with Section 411 of  the Act  questioning the  decision of  the  

Corporation to increase the ground rent and to impose penalty.  However,  

the  pleadings  filed  before  this  Court  do  not  show  whether  Parmanand  

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Mundhada and/or his heirs pursued the appeal and the same was decided by  

the Competent Authority.

3.7 After  the  judgment  of  the  High  Court,  respondent  nos.1  and  2  

submitted  application  dated  1.8.1991  to  the  Commissioner  of  the  

Corporation for entering their names in the municipal records by asserting  

that the heirs of Parmanand Mundhada had assigned the leasehold rights of  

the plot in their favour by registered deeds dated 2.9.1985 and this fact had  

been brought to the notice of the Corporation vide letter dated 23.9.1985.  

However, instead of taking action on the request of respondent nos. 1 and 2,  

the Corporation passed Resolution No. 137 dated 28.8.1991 for renewal of  

lease in favour of the appellant for a period of 30 years commencing from  

16.3.1991 subject to the condition of payment of ground rent at the rate of  

Rs.20,000/- per annum.  That resolution reads as under:

“Resolution  No.  137:  Since  Messrs  Saroj  Screen  Private  Limited has been paying from time to time ground rent of the  land and the land and building thereon are in possession of the  Saroj Screen Private Limited, there should be no objection for  mutation of the land in their name. Messrs Saroj Screen Private  Limited, has by written letter guaranteed to pay Rs. 15,000/- per  year by way of ground rent of the land. Therefore, as by way of  resolution  dated  29.10.1975,  bearing  no.  162,  the  Nagpur  Municipal Corporation has fixed the ground rent at Rs. 13,120/-  per year and Rs. 15,000/- by way of ground rent is being paid,  which is more than ground rent of Rs. 13,120/- which is fixed,  there will be no kind of financial loss of the Corporation. M/s  Saroj Screen Private Limited had paid the amount of ground  

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rent of Rs. 2,12,529.60 for the period 16.3.1984 to 25.3.1991.  Therefore, the House has taken into consideration the resolution  renewal of lease for 30 years from 16.3.1991 at the ground rent  of Rs. 15,000/- per annum and as per resolution no. 162 dated  29.10.1975  fix  the  ground rent  at  Rs.  15,000/-  after  making  recovery  of  arrears  according  to  that  resolution  and  recommended for acceptance. It also proposed that in stead of  ground rent of Rs. 13,120/- in future ground rent of Rs. 20,000/-  should be recovered, which suggestion was made by Hon’ble  Member  Shri  Atalbahadur  Singh.  This  suggestion  was  unanimously sanctioned by the voice of acceptance.”

3.8 In furtherance of the aforesaid resolution, lease deed dated 4.9.1991  

was  executed  between  the  Commissioner  of  the  Corporation  and  the  

appellant.

3.9 Respondent Nos. 1 and 2 challenged the decision of the Corporation  

to grant lease to the appellant in Writ Petition No. 1613 of 1992 and prayed  

that Resolution dated 28.8.1991 may be quashed and a direction be issued  

for registration of lease deed in their favour because the heirs of Parmanand  

Mundhada had assigned leasehold rights in their favour. They pleaded that  

in view of Resolution dated 29.10.1975 vide which the Corporation renewed  

lease  in  favour  of  Parmanand  Mundhada  for  a  period  of  30  years,  the  

subsequent resolution was liable to be declared as nullity, more so, because  

while deciding First Appeal Nos. 95 and 96 of 1980, the High Court had  

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found that the appellant was not ready and willing to perform its part of  

agreement dated 10.09.1947.  

3.10 In the written statement  filed by the appellant,  it  was pleaded that  

respondent nos. 1 and 2 do not have the locus standi to challenge Resolution  

dated 28.8.1991 because the plot had been assigned by Smt. Gangabai to  

Parmanand  Mundhada.  It  was  further  pleaded  that  the  assignment  deeds  

dated  2.9.1985  executed  by  the  heirs  of  Parmanand  Mundhada  had  no  

sanctity  in  the eyes  of  law because  tenure of  the initial  lease  granted  to  

Ghanshyam Mohta had ended in 1974. Another plea taken by the appellant  

was  that  Resolution  dated  29.10.1975  passed  by  the  Corporation  for  

extending the term of lease in favour of Parmanand Mundhada had became  

infructuous because he did not pay the enhanced ground rent and penalty.   

3.11 In  the  written  statement  filed  on  behalf  of  the  Corporation,  an  

objection was taken to the maintainability of the writ petition on the ground  

that the issues raised therein are purely contractual and the same cannot be  

decided by the High Court under Article 226 of the Constitution.  On merits,  

it was pleaded that assignment deeds dated 2.9.1985 are not binding on the  

Corporation because it had not been apprised about the transfer of leasehold  

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rights by the heirs of Parmanand Mundhada in favour of respondent nos. 1  

and 2.

3.12 At  this  stage,  it  will  be  appropriate  to  mention  that  during  the  

pendency of Writ Petition No.1613 of 1992, respondent nos.1 and 2 filed  

Special Civil Suit No.1135 of 1993 for eviction of the appellant, possession  

of the suit  property and recovery of damages by alleging that Resolution  

dated 28.8.1991 was illegal and without jurisdiction and lease deed dated  

4.9.1991 executed in favour of the appellant did not create any rights in its  

favour.

3.13 After filing the written statement in Writ Petition No.1613 of 1992,  

the Corporation passed Resolution dated 22.7.1996 and cancelled the lease  

granted to the appellant on the ground that previous sanction of the State  

Government had not been obtained as per the requirement of Section 70(5)  

of the Act. The appellant questioned this action of the Corporation in Writ  

Petition No.1786 of 1996.  By an interim order dated 14.8.1996, the High  

Court  directed that  status quo be maintained regarding possession of  the  

plot.  After  1  year  and about  8  months,  the Corporation sent  letter  dated  

27.4.1998 to the appellant and gave an assurance for restoration of the lease  

subject  to  the  condition  that  it  shall  have  to  withdraw the  writ  petition.  

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Thereupon, the appellant filed an application dated 6.5.1998 with a prayer  

that it may be allowed to withdraw the writ petition. The same remained  

pending  till  18.10.2001,  on  which  date  the  High  Court  dismissed  Writ  

Petition No.1786 of 1996 as withdrawn.

3.14 In the meanwhile, the State Government accorded sanction for grant  

of lease to the appellant for a period of 30 years, i.e.,  from 16.3.1991 to  

15.3.2021.   This  was  communicated  to  the  Corporation  vide letter  dated  

12.6.2000.   

3.15 On  coming  to  know  of  the  aforesaid  decision  of  the  State  

Government, respondent nos.1 and 2 filed Writ Petition No.3661 of 2001  

and prayed that communication dated 12.6.2000 be quashed by contending  

that during the pendency of Writ Petition Nos.1613 of 1992 and 1786 of  

1996, there was no justification for according sanction under Section 70(5)  

of  the  Act.  Another  plea  taken  by  respondent  nos.1  and  2  was  that  the  

decision  of  the  State  Government  and  the  Corporation  was  violative  of  

Article 14 of the Constitution inasmuch as public property was transferred to  

the appellant without conducting auction or inviting tenders so as to enable  

the members of public to participate in the process of grant of lease.  

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3.16 In its reply, the appellant controverted the allegation of favoritism and  

pleaded that respondent nos. 1 and 2 cannot question the sanction accorded  

by  the  State  Government  under  Section  70(5)  of  the  Act  because  their  

predecessor had not complied with the conditions incorporated in Resolution  

dated 29.10.1975.  It was further pleaded that the sanction accorded by the  

State  Government is  not  retrospective and the Corporation is  required to  

execute a new lease which would be effective from 1991.  Another plea  

taken by the appellant was that respondent nos. 1 and 2 had not come to the  

Court with clean hands inasmuch as they have suppressed the fact that the  

suit filed by them was pending before the Civil Court.   

3.17 The  Division  Bench  of  the  High  Court  overruled  the  preliminary  

objections raised by the appellant and the Corporation to the maintainability  

of the writ petition by relying upon the judgments of this Court in D.F.O.,  

South Kheri v. Ram Sanehi Singh (1971) 3 SCC 864 and S.J.S. Enterprises  

(P) Ltd. v. State of Bihar (2004) 7 SCC 166.   The Division Bench held that  

when a public authority is said to have acted in violation of the statutory  

provisions,  the  Court  can  grant  relief  to  the  aggrieved  person  and  the  

availability  of  the  alternative  remedy  does  not  operate  as  a  bar.   The  

Division Bench further held that respondent nos. 1 and 2 cannot be held  

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guilty of suppressing the factum of filing suit for eviction because the first  

writ petition had been instituted much before filing the suit. While dealing  

with the challenge to Resolution dated 28.8.1991 and the decision of the  

State  Government  to  accord  sanction  under  Section  70(5),  the  Division  

Bench opined that during the subsistence of Resolution dated 29.10.1975,  

the Corporation could not have granted lease in favour of the appellant and  

the State Government had no right to validate such grant.   However, the  

prayer of respondent nos. 1 and 2 for issue of a direction to the Corporation  

to implement Resolution dated 29.10.1975 was rejected on the premise that  

the issue was pending consideration before the trial Court.

4. Shri Gagan Sanghi, learned counsel for the appellant argued that the  

reasons assigned by the High Court for nullifying the decision taken by the  

State  Government  and  the  Corporation  to  grant  lease  in  favour  of  the  

appellant are legally unsustainable and the impugned judgment is liable to  

be set aside because Resolution dated 29.10.1975 passed by the Corporation  

for renewal of lease in favour of Parmanand Mundhada had not been acted  

upon.   Learned counsel  submitted  that  respondent  nos.  1  and 2  had  not  

produced any evidence before the High Court to substantiate their assertion  

that Parmanand Mundhada had filed an appeal under Section 397(3) read  

with Section 411 of the Act questioning Resolution dated 29.10.1975 to the  

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extent of enhancement of ground rent and imposition of penalty and argued  

that  even  if  such  an  appeal  had  been filed,  the  same did  not  entitle  the  

beneficiary of the resolution to claim renewal of lease without fulfilling the  

conditions  incorporated  therein.   Learned  counsel  argued  that  the  

Corporation  did  not  commit  any  illegality  by  passing  Resolution  dated  

28.8.1991 and executing lease deed dated 4.9.1991 in favour of the appellant  

because Parmanand Mundhada and his heirs did not come forward for the  

execution of lease deed in terms of Resolution dated 29.10.1975.  He further  

argued that sanction accorded by the State Government under Section 70(5)  

of the Act was legally correct and the High Court committed an error by  

nullifying the same on the specious ground that during the subsistence of  

Resolution dated 29.10.1975, the Corporation could not have granted lease  

to the appellant.

5. Shri  Shekhar  Naphade,  learned  senior  counsel  appearing  for  

respondent nos. 1 and 2 referred to Clause 8 of lease deed dated 28.10.1944  

executed between the Committee and Gopaldas Mohta and argued that the  

Corporation, which came to be constituted under the Act had no option but  

to  renew  the  lease  because  the  option  available  under  that  clause  for  

resumption of the plot by paying market value of the structure had not been  

exercised and Parmanand Mundhada in whose favour Smt. Gangabai had  

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executed assignment deed dated 12.8.1960 continued to enjoy the status of  

lessee.  Learned senior counsel relied upon Section 116 of the Transfer of  

Property  Act  and  the  judgment  of  this  Court  in  Damodhar  Tukaram  

Mangalmurti v. State of Bombay AIR 1959 SC 639 and argued that failure  

of  the  Corporation  to  resume  the  plot  after  paying  market  value  of  the  

structure leads to an irresistible inference that the Corporation had decided to  

renew the lease and, as a matter of fact, Resolution dated 29.10.1975 was  

passed to that effect.  Shri Naphade laid considerable emphasis on the fact  

that in terms of Clause 8 of lease deed dated 28.10.1944, the Corporation  

could have made fair and equitable revision of the ground rent and argued  

that  there  was  no  justification  for  10  times  increase  in  the  ground  rent  

necessitating filing of an appeal by Parmanand Mundhada.

6. Before dealing with the arguments of the learned counsel, we consider  

it necessary to make the following observations:

i) Although, the appellant has not disputed that in the partition, which  

took place in 1959 in the family of Gopaldas Mohta, the plot in question  

came to the share of  his  wife  Smt.  Gangabai  and that  she  had executed  

assignment deed dated 12.8.1960 in favour of Parmanand Mundhada, it has  

not placed on record copies of the partition deed and assignment deed so as  

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to  enable  the  Court  to  appreciate  the  extent  and  magnitude  of  the  right  

acquired by Parmanand Mundhada.

ii) Before the High Court the appellant and the Corporation pleaded that  

neither of them had any knowledge about assignment deeds dated 2.9.1985  

executed by the heirs of Parmanand Mundhada in favour of respondent nos.  

1 and 2 but their denial is belied by the averments contained in paragraph 3  

of C.A. No.1246 of 1991 filed by the appellant in First Appeal No. 95 of  

1980, which reads as under:

“3. However, during the pendency of the present appeal, it is  learnt, that the appellants have assigned their lease hold rights  in Plot no.5 in favour of one Shri Ghayanshamdas Mohta and  Smt. Kamla Devi Mohta of Akola under a registered Indenture  of Transfer dated 2nd September 1985 and as such the present  appellants have no right, title or interest in the suit property.  A  communication  dated  23.9.1985  received  by  the  respondent  no.2 from the said assignees is appended herewith.”

That apart, what is most surprising is that neither party has produced copies  

of assignment deeds dated 2.9.1985.

7. With the aforesaid handicap, we shall proceed to consider whether the  

High  Court  committed  an  error  by  quashing  Resolution  dated  28.8.1991  

passed  by  the  Corporation  and  the  sanction  accorded  by  the  State  

Government under Section 70(5) of the Act.   

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8. A  reading of lease deed dated 28.10.1944 shows that the Committee  

had  leased  out  the  plot  to  Gopaldas  Mohta  for  a  period  of  30  years  

commencing from 17.3.1944 with a clear stipulation that at the end of 30  

years’ period it  will  have an option to retake the structure by paying the  

prevailing market  value or  renew the lease  on revised  ground rent  for  a  

further  term of  30  years  by  incorporating  the  covenants,  provisions  and  

conditions contained in deed dated 28.10.1944 with a stipulation for further  

renewal  of  the  lease.   By  lease  deed  dated  10.9.1947,  Gopaldas  Mohta  

transferred  all  the  rights  and  interests  vested  in  him  including  the  one  

relating to  renewal of  the lease  to  the appellant,  who was also given an  

option to pay to the lessor, i.e. Gopaldas Mohta a sum of Rs.90,000/- during  

the  first  five  years  of  the  lease  and  purchase  all  his  rights  from  the  

Committee. An option was also given to the appellant to acquire the interest  

of the lessor on payment of the same price during the last year before expiry  

of the lease by efflux of time.   The appellant did exercise option for renewal  

of lease by sending letter dated 15.1.1973 to Parmanand Mundhada subject  

to the condition of renewal of lease by the Corporation.  After some time,  

the appellant filed Special Civil Suit No.96/1974 for specific performance,  

which  was  decreed  by  the  trial  Court  vide  judgment  dated  28.4.1980.  

However, the appellant’s joy proved to be short-lived because in the appeals  

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filed by the heirs of Parmanand Mundhada and respondent No. 2 and the  

Corporation, the High Court reversed the judgment of the trial Court and  

dismissed  the  suit  by  observing  that  the  appellant  could  not  prove  its  

readiness or willingness to implement the contract.  The appellant did not  

challenge the judgment of the High Court by filing a petition under Article  

136 of the Constitution. Therefore, the finding recorded by the High Court  

on the tenability of the appellant’s claim, which was primarily founded on  

Clause 5 of lease deed dated 10.9.1947, will be deemed to have become final  

and the appellant cannot now rely upon the terms and conditions of lease  

deed  dated  10.9.1947  for  contending  that  the  Corporation  was  bound  to  

renew the lease in its favour for a period of 30 years.  

9. The  resolution  passed  by  the  Corporation  for  renewal  of  lease  in  

favour of the appellant and the consequential action taken for the execution  

of lease deed dated 4.9.1991 were ex facie illegal and the High Court did not  

commit any error by quashing the same because,

(i) Resolution dated 29.10.1975 passed by the Corporation for renewal of  

lease in favour of Parmanand Mundhada for a period of 30 years had not  

been cancelled or rescinded and during the subsistence of that resolution,  

neither  the  Corporation  could  have  renewed  the  lease  in  favour  of  the  

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appellant  for  30  years  commencing  from  16.3.1991  nor  the  State  

Government could have granted sanction under Section 70(5) of the Act for  

such renewal.

(ii) Before passing the resolution for renewal of the lease in favour of the  

appellant for a period of 30 years, the Corporation did not obtain sanction of  

the State Government, which was sine qua non for any such action /decision.

(iii) It,  however,  appears  that  by  taking  advantage  of  the  fact  that  it  

continued  to  have  possession  of  the  plot,  the  appellant  induced  the  

functionaries of the Corporation to enter into a clandestine compromise for  

forwarding a proposal to the State Government to grant post facto sanction  

for renewal of the lease for 30 years from 16.3.1991 and the latter accorded  

sanction without realizing that alienation of any right or interest in a public  

property in favour of any person without following a procedure consistent  

with the doctrine of equality is impermissible.

10. The issue deserves to be considered from another angle.  Section 70 of  

the  Act  which  contains  provisions  governing  the  disposal  of  municipal  

property or property vesting in or under the management of the Corporation  

reads thus:

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“70.   Provisions  governing  the  disposal  of  municipal  property or property vesting in or under the management of  Corporation.

(1) No  nazul  lands,   streets,   public  places,  drains  or  irrigation channels shall be sold, leased or otherwise alienated,  save  in  accordance  with such rules as  the State  Government  may make in this behalf.  

(2) Subject to the provisions of sub-section (1), -   (a) the Commissioner may, [in his discretion], grant a lease  of  any  immovable  property  belonging  to  the  Corporation  including any right of fishing or of gathering and taking fruit,  flowers and the like, of which the premium of rent, as the case  may be, does not exceed [One Lakh] rupees for any period not  exceeding twelve months at a time : [Provided that every such lease granted by the Commissioner  other than a lease of a class in respect of which the Standing  Committee has by resolution exempted the Commissioner from  compliance  with  the  requirements  of  this  proviso,  shall  be  reported by him to the Standing Committee within fifteen days  after the same has been granted;]

(b) With  the  sanction  of  the  Standing  Committee  the  Commissioner may dispose of by sale or otherwise, any such  right as aforesaid, for any period not exceeding three years at a  time of which the premium or rent or both, as the case may be,  for any one year does not exceed [One lakh] rupees;

(c) With the sanction of the Corporation, the Commissioner  may lease, sell or otherwise convey any immoveable property  belonging to the Corporation.

(3) The Commissioner may -

[(a)………………….]        

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(b) with  the  sanction  of  the  Standing  Committee,   dispose of by sale or otherwise any moveable property   belonging to the Corporation:

(c) with  the  sanction  of  the  Corporation,  sell  or   otherwise convey any moveable property belonging to   the Corporation.  

(4) The  sanction  of  the  Standing  Committee  or  of  the  Corporation under  sub-section  (2)  or  sub-section  (3)  may be  given either generally for any class of cases or specifically in  any particular case.

(5) The foregoing provisions of  this  section shall  apply to  every disposal of property belonging to the Corporation made  under, or for the purposes of this Act:

Provided that –  (i) no property vesting in the Corporation in a trust shall be  

leased, sold or otherwise conveyed in a manner that is   likely to affect the trust subject to which such property is  held;

(ii) no land exceeding [five lakh] rupees in value shall be   sold, leased or otherwise conveyed without the previous  sanction of the State Government and every sale, lease or  other conveyance of property vesting in the Corporation  shall  be  deemed  to  be  subject  to  the  conditions  and   limitations  imposed  by  this  Act  or  by  any  other   enactment for the time being in force.  

(6) Notwithstanding  anything contained in  this  section  the  Commissioner may, with the sanction of the Corporation and  with the approval of the State Government, grant a lease, for a  period not exceeding thirty years,  of a land belonging to the  Corporation  which  is  declared  as  a  slum  area  under  the  provisions  of  the  Maharashtra  Slum  Area  (Improvement,  Clearance  and  Redevelopment)  Act,  1971  to  a  co-operative  society of slum dwellers, at such rent, which may be less than  the market value of the premium, rent or other consideration,  for the grant of such lease, and subject to such conditions as the  

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Corporation may impose.

The approval of the State Government under this sub-section  may be given either generally for any class of such lands or  specially in any particular case of such land:

Provided that,  the Commissioner may, in like manner renew,  from time to time, the lease for such period and subject to such   conditions as the Corporation may determine and impose.”

 Though,  the  exercise  of  power  by  the  Corporation  under  the  aforesaid  

section is not hedged with any particular condition except that in a case like  

the  present  one,  the  alienation  could  not  have  been  made  without  the  

previous sanction of the State Government, but in our constitutional scheme  

compliance  of  the  doctrine  of  equality  enshrined  in  Article  14  of  the  

Constitution has to be read as a condition precedent for exercise of power by  

the  State  Government  and  the  Corporation,  more  so,  when  it  relates  to  

alienation of public property or any right or interest therein. In this context,  

it  is  necessary  to  emphasis  that  the  Corporation  holds  the  property  as  a  

trustee of  the public  and any alienation of  such property or  any right  or  

interest therein otherwise than by way of auction or by inviting bids would  

amount to breach of that trust.

11. The concept of the 'State' as it was known before the commencement  

of the Constitution and as it  was understood for  about two decades after  

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26.1.1950 has undergone drastic change in recent years. Today, the State  

cannot  be  conceived  of  simply  as  a  coercive  machinery  wielding  the  

thunderbolt of authority. Now the Government is a regulator and dispenser  

of special services and provides to the large public benefits including jobs,  

contracts, licences, quotas, mineral rights etc. The law has also recognised  

changing  character  of  the  governmental  functions  and  need  to  protect  

individual  interest  as  well  as  public  interest.  The  discretion  of  the  

Government has been held to be not unlimited. The Government cannot give  

or withhold largesse in its arbitrary discretion or according to its sweet-will.  

The Government cannot now say that it will transfer the property (land etc.)  

or will give jobs or enter into contracts or issue permits or licences only in  

favour of certain individuals. In V. Punanan Thomas v. State of Kerala AIR  

1969 Ker. 81, K.K. Mathew, J. (as he then was) observed: -

“The  Government  is  not  and  should  not  be  as  free  as  an  individual in selecting recipients for its largesse. Whatever its  activities, the Government is still the Government and will be  subject to the restraints inherent in its position in a democratic  society. A democratic Government cannot lay down arbitrary  and capricious standards for the choice of persons with whom  alone it will deal.”

12. The traditional view that the executive is not answerable in the matter  

of  exercise  of  prerogative  power  has  long  been  discarded.  Prof.  H.W.R.  

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Wade in his work 'Administrative Law' 6th Edition highlighted distinction  

between the powers of public authorities and those of private persons in the  

following words:-

“... The common theme of all the authorities so far mentioned is  that the notion of absolute or unfettered discretion is rejected.  Statutory power conferred for public purposes is conferred as it  were upon trust, no absolutely - that is to say, it can validly be  used only in the right and proper way which Parliament when  conferring  it  is  presumed  to  have  intended.  Although  the  Crown's  lawyers  have  argued  in  numerous  cases  that  unrestricted permissive language confers unfettered discretion,  the truth is that, in a system based on the rule of law, unfettered  governmental discretion is a contradiction in terms.

The whole conception of unfettered discretion is inappropriate  to a public authority, which possesses powers solely in order  that it may use them for the public good.

There is  nothing paradoxical  in  the  imposition of  such legal  limits. It would indeed be paradoxical if they were not imposed.  Nor is this principle an oddity of British or American law; it is  equally prominent in French law. Nor is it a special restriction  which  fetters  only  local  authorities:  it  applies  no  less  to  ministers  of  the  Crown.  Nor  is  it  confined  to  the  sphere  of  administration:  it  operates  wherever  discretion  is  given  for  some  public  purpose,  for  example  where  a  judge  has  a  discretion to order jury trial. It is only where powers are given  for  the  personal  benefit  of  the  person  empowered  that  the  discretion is absolute. Plainly this can have no application in  public law.

For the same reasons there should in principle be no such thing  as unreviewable administrative discretion, which should be just  as much a contradiction in terms as unfettered discretion. The  question which has to be asked is what is the scope of judicial  review, and in a few special cases the scope for the review of  discretionary decisions may be minimal. It remains axiomatic  

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that all discretion is capable of abuse, and that legal limits to  every power are to be found somewhere.”  

13. In Padfield v. Minister of Agriculture, Fishery and Food (1968) A.C.  

997,  the  Court  was  called  upon  to  decide  whether  the  Minister  had  the  

prerogative not to appoint a Committee to investigate the complaint made by  

the members of the Milk Marketing Board that majority of the Board had  

fixed  milk  prices  in  a  way  which  was  unduly  unfavourable  to  the  

complainants. While rejecting the theory of absolute discretion, Lord Reid  

observed:-

“Parliament  must  have  conferred  the  discretion  with  the  intention  that  it  should  be  used  to  promote  the  policy  and  objects of the Act; the policy and objects of the Act must be  determined by construing the Act as a whole and construction is  always a matter of law for the court. In a matter of this kind it is  not possible to draw a hard and fast line, but if the Minister, by  reason  of  his  having  misconstrued  the  Act  or  for  any  other  reasons, so uses his discretion as to thwart or run counter to the  policy  and  objects  of  the  Act,  then  our  law  would  be  very  defective  if  persons  aggrieved  were  not  entitled  to  the  protection of the court.”

14. In Breen v. Amalgamated Engineering Union (1971) 2 QB 175, Lord  

Denning MR observed:-

"The discretion of a statutory body is never unfettered. It is a  discretion  which  is  to  be  exercised  according  to  law.  That  

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means  at  least  this:  the  statutory  body  must  be  guided  by  relevant considerations and not by irrelevantly. It its decision is  influenced by extraneous considerations which it ought not to  have  taken into  account,  then the  decision  cannot  stand.  No  matter that  the statutory body may have acted in good faith;  nevertheless the decision will be set aside. That is established  by  Padfield  v.  Minister  of  Agriculture,  Fisheries  and  Food  which is a landmark in modern administrative law."

15. The question whether the State and / or its agency / instrumentality  

can transfer the public property or interest in public property in favour of a  

private person by negotiations or in a like manner has been considered and  

answered  in  negative  in  several  cases.   In  Akhil  Bhartiya  Upbhokta  

Congress  v.  State  of  Madhya Pradesh (2011)  5 SCC 29,  this  Court  was  

called upon to examine whether the Government of Madhya Pradesh could  

have allotted 20 acres land to Shri Kushabhau Thakre Memorial Trust under  

the  M.  P.  Nagar  Tatha  Gram Nivesh  Adhiniyam,  1973 read with  M.  P.  

Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavano Tatha Anya  

Sanrachanao K Vyayan Niyam, 1975.  After noticing the provision of the  

Act and the Rules, as also those contained in M.P. Revenue Book Circular  

and the judgments of this Court in S. G. Jaisinghani v. Union of India AIR  

1967 SC 1427,  Ramana Dayaram Shetty v. International Airport Authority  

of India (1979) 3 SCC 489,  Erusian Equipment and Chemicals Ltd. v. State  

of W.B. (1975) 1 SCC 70,  Kasturi Lal Lakshmi Reddy v. State of J&K  

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(1980)  4  SCC 1,  Common Cause  v.  Union of  India  (1996)  6  SCC 530,  

Shrilekha Vidyarthi v. State of U. P. (1991) 1 SCC 212,  LIC v. Consumer  

Education & Research Centre (1995) 5 SCC 482, New India Public School  

v.  HUDA  (1996)  5  SCC  510,  the  Court  culled  out  the  following  

propositions:

“What  needs  to  be  emphasised  is  that  the  State  and/or  its  agencies/instrumentalities cannot give largesse to any person  according to the sweet will and whims of the political entities  and/or officers of the State. Every action/decision of the State  and/or its agencies/instrumentalities to give largesse or confer  benefit must be founded on a sound, transparent, discernible  and well-defined policy, which shall  be made known to the  public  by  publication  in  the  Official  Gazette  and  other  recognised  modes  of  publicity  and  such  policy  must  be  implemented/executed by adopting a non-discriminatory and  non-arbitrary method irrespective of the class or category of  persons  proposed  to  be  benefited  by  the  policy.  The  distribution of largesse like allotment of land, grant of quota,  permit  licence,  etc.  by  the  State  and  its  agencies/instrumentalities should always be done in a fair and  equitable manner and the element of favouritism or nepotism  shall not influence the exercise of discretion, if any, conferred  upon the particular functionary or officer of the State.

We may add that  there  cannot  be any policy,  much less,  a  rational  policy of  allotting land on the basis  of  applications  made  by  individuals,  bodies,  organisations  or  institutions  dehors  an  invitation  or  advertisement  by  the  State  or  its  agency/instrumentality. By entertaining applications made by  individuals, organisations or institutions for allotment of land  or  for  grant  of  any  other  type  of  largesse  the  State  cannot  exclude other eligible persons from lodging competing claim.  Any allotment of land or grant of other form of largesse by the  State or its agencies/instrumentalities by treating the exercise  

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as  a  private  venture  is  liable  to  be  treated  as  arbitrary,  discriminatory  and  an  act  of  favouritism  and/or  nepotism  violating the soul of the equality clause embodied in Article 14  of the Constitution.”

16. The factual matrix of this case shows that before granting 30 years’  

lease of the plot in favour of the appellant, the Corporation neither issued  

any advertisement nor followed any procedure consistent with the doctrine  

of equality so as to enable the members of the public to participate in the  

process of alienation of public property.  Therefore, the conclusion reached  

by  the  High  Court,  though  for  different  reasons,  that  Resolution  dated  

28.8.1991 and the sanction accorded by the State Government vide letter  

dated 12.6.2000 are legally unsustainable does not call for interference by  

this Court.           

17. We are also convinced that even though the lease granted to Gopaldas  

Mohta  was  renewed in  favour  of  Parmanand  Mundhada  vide  Resolution  

dated 29.10.1975, respondent Nos.1 and 2 cannot derive any benefit from  

the said renewal merely because the Corporation did not cancel or rescind  

the resolution.  It was neither the pleaded case of respondent Nos.1 and 2 nor  

any material  was  produced by them before the High Court  to  show that  

Parmanand Mundhada had taken any action in  furtherance of  Resolution  

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dated 29.10.1975 and fresh lease deed was executed in his favour. The only  

plea taken by them was that Parmanand Mundhada had filed an appeal under  

Section 397(3) read with Section 411 against increase in the ground rent and  

the imposition of penalty.  However, nothing has been said about the fate of  

that appeal.  If Parmanand Mundhada, his heirs or respondent Nos.1 and 2  

felt that the disposal of the appeal has been unduly delayed then they could  

have filed a writ for issue of a mandamus directing the appellate authority to  

decide the appeal within a specified period but no such step is shown to have  

been taken by either of them. Therefore, we are constrained to take the view  

that Resolution dated 29.10.1975 had become redundant and the same can  

no longer be relied upon by respondent Nos.1 and 2 for claiming any right or  

interest in the plot.

18. The  ratio  of  the  judgment  in  Damodhar  Tukaram Mangalmurti  v.  

State of Bombay (supra) which has been relied upon by Shri Naphade has no  

bearing on this case.  The question which came up for consideration in that  

case was whether Civil Court has the jurisdiction to decide the issue of fair  

and equitable enhancement of the annual rent. The facts of that case were  

that  the then Provincial  Government of  the Central  Provinces and Berar,  

Nagpur devised a scheme to extend residential accommodation by acquiring  

agricultural land and making it available for residential purposes. The lease  

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granted in respect  of building sites  of  10,000 sq.  ft.  contained a renewal  

clause with a stipulation that the lessor can make fair and equitable increase  

in the amount of annual rent. At the time of renewal, the lessor increased the  

annual rent from Rs. 3-8-0 to Rs. 21-14-0 in accordance with Clause III of  

the  indenture  of  lease.   One  of  the  preliminary  issues  framed  by  the  

Subordinate Judge, Nagpur was whether the Civil Court has the jurisdiction  

to decide as to what should be fair and equitable enhancement in the amount  

of  annual  rent.  He  ruled  in  favour  of  the  plaintiff  and  his  view  was  

confirmed  by  the  lower  appellate  Court.  When  the  matter  was  taken up  

before the High Court, the Division Bench consisting of the Chief Justice  

and Mudholkar, J expressed divergent views. The third Judge to whom the  

matter was referred agreed with the learned Chief Justice that the Civil Court  

did  not  have  jurisdiction  in  the  matter.  By  majority  of  2:1,  this  Court  

reversed the judgment of the High Court.  Speaking for the majority, S. R.  

Das, J made the following observations:  

“We consider that the words” fair and equitable ‘must be given  their due meaning and proper effect. The question then asked  is — what meaning is to be given to the words “such ... as the  lessor  shall  determine”.  It  is  indeed  true  that  these  words  constitute  an  adjectival  clause  to  the  expression  “fair  and  equitable enhancement”, but we consider that the meaning of  the  adjectival  clause  is  merely  this:  the  lessor  must  first  determine  what  it  considers  to  be  fair  and  equitable  enhancement; but if in fact it is not so, it is open to the lessee  to  ask  the  court  to  determine  what  is  fair  and  equitable  

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enhancement. We do not think that on a proper construction of  the  clause,  the  intention  was  to  oust  the  jurisdiction  of  the  court and make the determination of the enhancement by the  lessor final and binding on the lessee.”

19. In the present case, we are not concerned with the question whether  

the decision of the Corporation to increase the rent was legally correct and  

justified  because,  as  mentioned  above,  the  appeal  allegedly  filed  by  

Parmanand Mundhada under Section 397 (3) read with Section 411 of the  

Act was not pursued to its logical end and in the writ petitions filed by them,  

respondent  Nos.1  and  2  did  not  question  ten  times  increase  in  the  rent  

payable by the lessee.   

20. The argument of Shri Shekhar Naphade, learned senior counsel for  

respondent Nos.1 and 2 that the Corporation is bound to renew the lease  

granted to his clients in terms of Section 116 of the Transfer of Property Act,  

1882 because the plot in question remained in their possession through the  

appellant  also merits rejection.  The reason for this conclusion is that no  

evidence was produced before the High Court to show that the appellant was  

continuing  in  possession  with  the  consent  of  Parmanand  Mundhada,  his  

heirs or respondent Nos.1 and 2.  Rather, it was their pleaded case that after  

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expiry of the period specified in lease deed dated 10.9.1947, the appellant  

did not have any right to continue in possession.

21. We  are  also  of  the  view that  Resolution  dated  29.10.1975  though  

passed  in  consonance  with  Clause  10  of  lease  dated  28.10.1944,  has  to  

satisfy the test of reasonableness, equality and fairness.  Though, the initial  

lease  was  granted  to  Gopaldas  Mohta  before  coming  into  force  of  the  

Constitution, while considering the issue of renewal of lease the Corporation  

was duty bound to take action and decision strictly in consonance with the  

constitutional  principles  and  decision  to  renew  the  lease  in  favour  of  

Parmanand Mundhada could not have been taken except after following a  

procedure consistent with the equality clause, which was not done.

22. In the result, the appeals are dismissed.  The appellant shall hand over  

possession of the plot to the Corporation within a period of three months.  

After taking possession of the plot, the Corporation shall alienate the same  

by  sale,  lease,  or  otherwise  by  auction  or  by  inviting  tenders  and  after  

following a procedure consistent with Article 14 of the Constitution. The  

Corporation shall pay market value of the structure, as obtaining on the date  

of the order of the High Court to the appellant.     

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…..……….....……..….………………….…J.           [G.S. SINGHVI]

…………..………..….………………….…J.           [SUDHANSU JYOTI MUKHOPADHAYA]

New Delhi, March 26, 2012.          

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