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, Ninth Edition, 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 (1960) 1 All ER 668, 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 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 17
of the term thereof may continue by holding over for year by year or month by month, as the case may be."
Bombay High Court
Smt. Gangabai Gopaldas Mohta vs State Of Maharashtra on 8 December, 2008
Bench: B. P. Dharmadhikari
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
WRIT PETITION No.. 5733 OF 2007
1. By this Writ Petition filed under Articles 226 and 227 of
the Constitution of India, the Petitioner a government lessee in
possession of land situated at Murtizapur has challenged the order
dated 03.09.2007 passed by Respondent No.1 - State of Maharashtra,
directing the land to be resumed and calling report from Respondent
No.3 Collector for its allotment afresh in favour of Respondent Nos. 4
and 5, as per law. The Petitioner is about 99 years old and therefore,
as requested, Writ Petition was taken up for final hearing at admission
stage itself. Rule made returnable forthwith. Heard finally by consent
of the parties.
2. Facts in the matter are not much in dispute. The land
which forms subject matter of present Writ Petition was initially leased
out to predecessors in title of Petitioner namely "New Mofussil 3
Company Limited" on 04.08.1905 by Secretary of State of India in
Council for a period of 30 years which contemplated further renewal.
However, total period thereof was not to exceed in aggregate 90 years.
On 19.03.1937 the said lease was renewed for a period of next 30
years i.e. up to 31.12.1964. The last renewal is as per the order
passed in 1980 and for period unto 31.12.1994. The orders of last
renewal have been passed on 29.01.1980 whereby earlier orders of
resumption dated 31.05.1971 passed by Respondent No..1, were
cancelled and renewal was ordered. The Petitioner mentions that it
was for period of 30 years w.e.f. 01.01.1963 i.e. unto 31.12.1993. On
14.06.1988, upon an application of Respondent No. 4 Agriculture
Produce Market Committee (APMC), the Officer on Special Duty
reviewed this order dated 29.01.1980 and held that the Petitioner has
used the land for purpose other than the one for which it was leased
out, and therefore, ordered resumption. The said order was
challenged in Writ Petition No. 1608/1988 before this Court and on
16.04.1992 this Court dismissed that Writ Petition. This dismissal of
Writ Petition was questioned in Letters Patent Appeal No. 70/1992
and the Division Bench of this Court on 19.07.2006 allowed that
Appeal and remanded the matter back to Respondent No..1 to 4
consider the application filed by Respondent No..4 afresh in
accordance with the provisions of law. Said review was undertaken by
Respondent No..1 on 14.06.1988 in response to application dated
01.03.1980 filed by Respondent No..4 A.P.M.C. Respondent No..4 an
Authority constituted under the provisions of Maharashtra Agricultural
Produce Marketing (Development and Regulation) Rules, 1967
wanted the said land for its own purpose and expansion. Respondent
No. 5 was leased out part of land by Petitioner for running a Ginning
& Pressing Mill and therefore, Respondent No..5 had also moved
application to Respondent No..1 for cancellation of orders of renewal
in favour of Petitioner.
3. There was some Civil litigation filed by the Petitioner
against the said Respondent No..5 and ultimately a compromise decree
was passed in First Appeals No. 43/1978 and 142/1977 whereby
Respondent No..5 was put under obligation to vacate and deliver
possession to Petitioner on or before 31.12.1990. As he did not
vacate Execution Case No. 1/1991 was filed by the present Petitioner
against him. Petitioner alleges that in this Execution case Respondent
No..5 with the influence of Respondent No..2 arranged & filed an 5
objection through Sub Divisional Officer, Murtizapur on 31.07.2007.
The Petitioner states that this was done only to arrest execution of
warrant of possession which was already issued.
4. Thereafter Respondent No..2 issued notice to Petitioner for
hearing on application filed by Respondent No..4 A.P.M.C. as per
directions of this Court in Letters Patent Appeal No. 70/1992.
According to Petitioner, this was also to help Respondent No..5 to
prolong or postpone execution of decree. The Petitioner could not
attend the hearing as notice thereof was of very short duration and
then the hearing was adjourned to 05.02.2007. But again due to
short notice, hearing could not take place. Further hearing was on
15.03.2007 and Petitioner received notice thereof on 12.03.2007.
Subsequently on 14.03.2007 she received notice that hearing was
scheduled on 17.03.2007 instead of 15.03.2007 and then she received
notice dated 01.06.2007 for hearing on 06.06.2007. The Petitioner on
each occasion could not even arrange for railway reservations and sent
telegram to Respondent No..2 in this respect, and sought advance
notice of at least one month. Petitioner was then by notice dated
06.06.2007 called upon to file written notes of argument, which she 6
submitted on 14.06.2007 by R.P.A.D. and raised preliminary objection
about the locus of Respondent No..4 and also maintainability of
application for review at its instance, because Respondent No..4 did
not pass any resolution and authorize filing of review. The Petitioner
requested for detailed opportunity of hearing and its the contention of
the Petitioner that without deciding her preliminary objection and
without giving her opportunity of hearing, the Respondent No..2
passed order on 03.09.2007, which Petitioner received on 08.10.2007.
It is this order which the Petitioner has questioned in the present Writ
Petition.
5. I have heard Advocate Shri Anand Parchure, for Petitioner,
learned Special Assistant Government Pleader Tajwar Khan for
Respondent nos. 1 to 3, Advocate Shri G.B. Lohiya, for Respondent
No..4 and Advocate Shri A.M. Gordey, for Respondent No..5.
6. After stating the facts, Advocate Parchure has contended
that as the Respondent No.5 wanted to avoid execution of decree, he
manipulated the application for review and also filed his own
application before Respondent No.2 for review of order of renewal of 7
lease dated 29.01.1980. He contends that said application allegedly
moved by Respondent No.4 was not legal and valid, and similarly
Respondent No.5 facing decree of eviction and execution filed by the
Petitioner, could not have moved any application before Respondent
No.2. He further contends that Petitioner had applied for opportunity
of hearing, but the same was not given to her, and the matter was
decided hastily only to oblige Respondent nos. 4 and 5. He argues
that because of provisions of Section 337 read with Section 29[2][c]
of the Maharashtra Land Revenue Code, 1966 the Petitioner did not
remain only a lessee, but became an occupant and as such, the action
of resumption of land as taken by Respondent nos. 1 and 2 is without
jurisdiction. He further points out that as per the lease, rights given to
Petitioner were transferable and hence, there is no breach. The order
of renewal has been passed on 29.01.1980 and as such lease having
been renewed unto 31.12.1994 breach, if any, stood condoned and
Respondent No..1 waived its right in that respect. He therefore, states
that the entire action is non-est and also in breach of principles of
natural justice. He points out that though period of lease has expired
on 31.12.1994, in view of the legal position, Respondent nos. 1 and 3
have continued to accept rent every year from Petitioner and the rent 8
has been received till the year 2000 by them. He contends that the
petition therefore, needs to be allowed.
7. Advocate Shri Gordey, for Respondent No. 5 states that
there was breach prior to last renewal of lease and vide
communication dated 16.02.1949 the Government of Central
Provinces at Berar condoned that breach of using the premises for oil
mill, subject to lessee agreeing to pay annual ground rent of Rs.1931/-
so long as the lease is used for oil mill as recommended by the
Collector. The Government on 17.7.1971 canceled the lease and
ordered resumption because of change of user and on 31.8.1971 the
Petitioner applied to Secretary, Government of Maharashtra for
revocation of that order and for investigation to find out whether any
breach has been committed or not. On 29.01.1980 the Minister of
State for Revenue, passed order canceling the said order dated.
31.05.1971 and restored back the lease-hold rights of Petitioner.
Accordingly on 26.03.1980 the lease was renewed for period of 30
years commencing from 1.1.1964. He states that said period of 30
years expired on 31.12.1994 and thereafter, no lease deed could have
been executed in favour of the present Petitioner. He therefore, states 9
that in these circumstances, challenge in the present petition is
rendered merely academic as maximum period of lease of 90 years
expired on 31.12.1994.
8. Because Respondent No. 4 APMC needed the land, it
applied for review of the order passed by the Hon'ble Minister on
29.1.1980 vide its application dated 1.3.1980. The review was
opposed by the present Petitioner and ultimately on 20.04.1988, the
matter was heard. Orders came to be passed on 14.06.1988 and
review applied for by Respondent No.4 APMC was allowed and
matter was sent to Collector, Akola for further action. Writ Petition
No. 1680/1992 filed by the Petitioner challenging that order was
dismissed on 16.04.1992. Petitioner then filed Letters Patent Appeal
No.17/1992 which came to be allowed on 19.07.2007 after noticing
that Special Officer who passed order on 14.6.1998 had no
jurisdiction. The matter was sent back to Government for considering
application of review made by Respondent No.5. It is in this
background that the Hon'ble Minister passed order impugned herein
on 3.9.2007. He states that in these circumstances, the Petitioner has
no right even to maintain present petition. He points out that the 10
Respondent No..5 had independently moved separate application for
grant of lease in its favour, and that application was also pending
before the State Government at the relevant time.
9. In order to point out nature of occupation of present
Petitioner, learned Advocate Shri Gordey, as also Advocate Shri Lohiya
and learned Special Assistant Government Pleader Ms. Tajwar Khan,
invited attention to various provisions of Maharashtra Land Revenue
Code, 1966 and Madhya Pradesh Land Revenue Court, 1954. They
contend that the provisions of all these enactments contemplate
"government lessee" as distinct class by itself and he cannot be
occupant Class-I or occupant Class-II. It is their contention that
"tenant" is altogether separate entity and concept, in these statutes.
Petitioner cannot be either occupant Class-I or Class-II or then a
tenant. She is government lessee and her rights are squarely governed
by provisions of Government Grants Act, 1895. They point out that last
renewal in the present matter is of 1980 and it was for a period of 30
years, from 1.1.1965 which admittedly expired on 31.12.1994. In that
view of the matter, the provisions of Maharashtra Land Revenue
Code,1966 which came into force in the meanwhile, apply to this 11
government grant & land and the said grant was in terms of Section
38 of the Maharashtra Land Revenue Code. As the total grant was
only for 90 years, after 1994 there could not have been and there is no
renewal in favour of Petitioner. The Petitioner has no right to
continue to occupy the suit land and as such the present petition is
misconceived. They also point out that the breach of conditions has
been noticed in 1971 and the said breach has not been condoned by
the government. However, according to them after expiry of total
lease period, the said aspect of breach becomes insignificant and
irrelevant. They also point out that the Petitioner herself made efforts
to alter her status from that as government lessee to "occupant", but
those efforts have not succeeded till date. It is further stated that on
4.6.1985 the Revenue Authorities rejected such application of
Petitioner, and Petitioner has not challenged said order further.
10. Ms. Khan, learned Special A.G.P. specifically points out
that the impugned order has been passed in view of the expiry of lease
in the year 1994 and proposals called for Collector are as per
requirement of Maharashtra Land Revenue Disposal of Government
Land Rules, and the same shall be processed strictly in accordance 12
with those Rules and Maharashtra Land Revenue Code. She states
that the government is not giving any preference to any body in
violation of law and Petitioner is not being victimised at all in the
matter.
11. Advocate Shri Parchure, in his brief reply has stated that
the Petitioner has challenged order dated. 4.6.85 by filing appeal
before the Divisional Commissioner, Amravati and said appeal is still
pending. He further points out that the lease amount has been
accepted from Petitioner every year up to 2000, and as such the
contentions that Petitioner has no right to maintain this petition or
than to continue to occupy the land in dispute are without substance.
He contends that acceptance of rent thereafter amounts to creation of
fresh lease and hence Petitioner is entitled to continue in occupation
and also point out that his status was as occupant and he cannot be
evicted. He points out that the Petitioner has written letters on
8.11.1999 and 7.1.1995, requesting to change her category from that
of government lessee to occupant, and those request letters are also
pending.
13
12. The arguments show that the fact that total period of lease
was of 90 years is not in dispute. The lease began from 1.1.1905 and
I find that said document specifically stipulated that renewal is
possible, but the total period of lease including initial grant and the
renewals shall not exceed 90 years. This stipulation exists in first
renewal granted on 19.03.1937 for the period 1.1.1935 to 31.12.1964.
Thus period of 60 years was over on 31.12.1964 and hence as per the
stipulation the last renewal could have been only for 30 years i.e. unto
31.12.1994 so as to complete the period of, 90 years from 1.1.1905.
The Petitioner has purchased the lease hold rights in respect of this
land on 24.4.1947. The communication dated. 16.02.1949 of Under
Secretary, to Government of Central Provinces and Berar shows that
lessee at that time was using premises for oil mill, but then the
government condoned that breach, if lessee agreed to pay ground rent
of Rs. 1931/-. On 31.05.1971 the State Government exercised its
rights to re-enter, after coming to know that there was further change
of user and land was put to use for still other purposes.
13. As per lease deed dated 4 August 1905 the initial grant is for
period of 30 years from first day of January 1905 and the renewal 14
contemplated is for term of 30 years with express stipulation that "the
Secretary of state will at the end of the term of years hereby granted and
so on from time to time of years hereby thereof at the end of each
successive further term of years as shall be granted at the request and
cost of the Lessee execute to the Lessee a new lease of the premises hereby
demised by way of renewal for term of 30 years provided always that
such renewed terms of years as shall be granted shall together with the
original term of year not exceed in the aggregate the period of 90 years
and (the rent of said premises hereby demised being hereby expressly
made subject to enhancement on the granting of each renewed lease) that
such renewed leases shall be granted ..--...". In the renewed deed of
lease executed on 19th March 1937 the said clause reads "and also
that the lessor will at the end of the terms of years hereby granted and
soon from time to time thereafter at the end of each successive further
terms of years as shall be granted at the request and cost of the lessee
execute to lessee a new lease of the premises hereby demised by way of
renewal for the term of 30 years provided always that such renewed term
of years as shall be granted shall together with original term of years not
exceed in the aggregate the period of 90 years from the first day of
January 1905 and the rent of the....-----.......".In the renewal of lease 15
executed on 26th March 1980 the said clause reads "and also that the
lessor will at the end of the last terms of years hereby granted and seen
from time to time thereafter at the end of each successive further terms of
years as shall be granted at the request and cost of the lessee execute to
lessee a new lease of the premises hereby demised by way of renewal for
the term of 30 years provided always that such renewed term of years as
shall be granted shall together with original term of years not exceed in
the aggregate the period of 90 years from the first day of January 1905
and the rent of the....-----.......". Thus intention of parties to restrict the
total duration of lease i.e. original with its renewals to 90 years his
explicit and hence it is apparent that after expiry of last renewal on
31st December 1994 no further renewal in the matter lease/was
possible.
14. In Anant Mule vs. State of Maharashtra reported at 2007(3)
Bom. C.R. 690, I had the occasion to consider the following precedents
relevant also in this matter. In 2004 (1) SCC 1=AIR 2004 S.C. 32
-State of U.P. and others, v. Lalji Tandon (Dead), on the argument
about perpetual lease, in paragraph 13 & 17 Hon'ble Apex Court
observes: --
16
"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, Ninth Edition, 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 (1960) 1 All ER 668, 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 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 17
of the term thereof may continue by holding over for year by year or month by month, as the case may be."
"17. Green v. Palmer (1944) 1 All ER 670, bears a close resemblance with the facts of the present case. There the parties had entered into a lease agreement for six months. One of the covenants in the lease read so - "The tenant is hereby granted the option of continuing the tenancy for a further period of six months on the same terms and conditions including this clause, provided the tenant gives to the landlord in writing four weeks' notice of his intention to exercise his option." The plea raised on behalf of the tenant was that the clause gave him a perpetual right of renewal. Uthwatt, J. of Chancery Division held-
". . . . . . . .the first thing one observes is that, in terms, there is granted to the tenant a single option exercisable only once upon the named event, and the subject-matter of that option is an option "of continuing the tenancy for a further period of six months on the same terms and conditions including this clause." To my mind, what that means is this : the tenant is to be allowed once, and once only, the opportunity of continuing the tenancy continuing it for a further six months. Then we come to the critical words "on the same terms and conditions including this clause." As I read it, that means there is included in the new tenancy agreement a right in the tenant, if he thinks fit, to go on for one further six months, and when you have got to that stage you have finished with the whole matter. In other words, it comes to this : "Here is 18
your present lease. You may continue that, but I tell you, if you continue it, you continue it on the same terms as you were granted the original lease. You may continue it for a further 6 months with the right to go on for another 6 months."
Upon that footing, in the events which have happened, all the landlord was bound to do under this arrangement was to permit the tenant to occupy for a period not exceeding 18 months in the whole from the time when the original lease was granted."
18. We find ourselves in full agreement with the view of the law taken in the decisions cited hereinabove. It is pertinent to note that the Respondent is not claiming a lease in perpetuity or right to successive renewals under the covenant for renewal contained in the 1887 lease. The term of 50 years under the 1887 lease came to an end in the year 1937 and the option for renewal was exercised by the Respondent as assignee of the original lessee which exercise was honoured by the lessor State executing a fresh deed of lease belatedly on February 20, 1945. This lease deed does not set out any fresh covenants, mutually agreed upon between the parties for the purpose of renewal. Rather it incorporates, without any reservation, all the covenants, provisos and stipulations as contained in the principal lease as if they had been herein repeated in full. Not only was a fresh deed of lease executed but the conduct of the parties also shows that at the end of the term appointed by the 1945 lease, i.e. in or around the 19
year 1987, the lessor did not exercise its right of re-entry. On the other hand, the Respondent exercised his option for renewal. The officials of the appellant State, i.e. the Collector and the Board of Revenue, all recommended renewal and advised the State Government to expedite the renewal. The State Government was generally renewing such like leases by issuing general orders/instructions to its officers. At no point of time prior to the filing of the counter-affidavit, on the present litigation having been initiated, the State or any of its officers took a stand that the right of renewal, as contained in the principal deed of lease, having been exhausted by exercise of one option for renewal, was not available to be exercised again.
19. Now that the covenant for renewal has been referentially incorporated without any reservation in the lease deed of 1945 the exercise of option for renewal cannot be denied to the Respondent. However, in the lease deed to be executed for a period of 50 years commencing May 20, 1987, the covenant for renewal need not be incorporated and, therefore, the term of the lease would come to an end on expiry of 50 years calculated from May 20, 1987. This view also accords with the view of the law taken in Green v. Palmer (supra)."
15. In view of this legal position and intention of parties, mere
acceptance of rent from Petitioners after expiry of lease & till 2000 20
does not confer any legal right for further renewal or to remain in
occupation of the suit property. In Shanti Prasad Devi v. Shankar
Mahto ( 2005 (5) SCC 543 = AIR 2005 S.C. 2905), Hon Apex Court
considers question whether mere acceptance of rent from a lessee
overstaying the lease period can be construed as consent of lessor to
continuation of lease. Following observations are important: --
"17. We fully agree with the High Court and the first appellate Court below that on expiry of period of lease, mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying 'assent' to the continuance of the lessee even after expiry of lease period. To the legal notice seeking renewal of lease, the lessor gave no reply. The agreement of renewal contained in clause (7) read with clause (9) required fulfillment of two conditions; first the exercise of option of renewal by the lessee before the expiry of the original period of lease and second, fixation of terms and conditions for the renewed period of lease by mutual consent and in absence thereof through the mediation of local Mukhia or Panchas of the village. The aforesaid renewal clauses (7) and (9) in the agreement of lease clearly fell within the expression 'agreement to the contrary' used in Section 116 of the Transfer of Property Act under the aforesaid clauses option to seek renewal was to be exercised before expiry of the lease and on specified conditions.
21
18. The lessor in the present case had neither expressly nor impliedly agreed for renewal. The renewal as provided in the original contract was required to be obtained by following a specified procedure i.e. on mutually agreed terms or in the alternative through the mediation of Mukhias and Panchas. In the instant case, there is a renewal clause in the contract prescribing a particular period and mode of renewal which was 'an agreement to the contrary' within the meaning of Section 116 of the Transfer of Property Act. In the face of specific clauses (7) and (9) for seeking renewal there could be no implied renewal by 'holding over' on mere acceptance of the rent offered by the lessee. In the instant case, option of renewal was exercised not in accordance with the terms of renewal clause that is before the expiry of lease. It was exercised after expiry of lease and the lessee continued to remain in use and occupation of the leased premises. The rent offered was accepted by the lessor for the period the lessee overstayed on the leased premises. The lessee, in the above circumstances, could not claim that he was 'holding over' as a lessee within the meaning of Section 116 of the Transfer of Property Act".
16. Here, precedence given to provisions of Government
Grants Act need to be noticed & I find it proper to reproduce paras 78
& 79 form AIR 1986 S.C. 872 --Express Newspapers Pvt. Ltd. v. Union 22
of India, which aptly explain the same as under:--
"78. It is common ground that the perpetual lease was a Government grant governed by the Crown Grants Act, 1895, now known as the Government Grants Act. The Act is an explanatory or declaratory Act. Doubts having arisen as to the extent and operation of the Transfer of Property Act, 1882 and as to the power of the Government to impose limitations and restrictions upon grants and other transfers of land made by it or under its authority, the Act was passed to remove such doubts as is clear from the long title and the preamble. The Act contains two sections and provides by S. 2 for the exclusion of the Transfer of Property Act, 1882 and, by S. 3 for the' exclusion of any rule of law, statute or enactment of the Legislature to the contrary. Ss. 2 and 3 read as follows :
"2. Transfer of Property Act, 1882, not to apply to Government grants -
Nothing in the Transfer of Property Act, 1882, contained shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein heretofore made or hereafter to be made by or on behalf of the Government to, or in favour of, any person whomsoever; but every such grant and transfer shall be construed and take effect as if the said Act had not been passed." "3. Government grants to take effect .according to their tenor - All provisions, restrictions, conditions and limitations over 23
contained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding."
79. It is plain upon the terms that S. 2 excludes the operation of the Transfer of Property Act, 1882 to Government grants. While S. 3 declares that all provisions, restrictions, conditions and limitations contained over any such grant or transfer as aforesaid shall be valid and shall take effect according to their tenor, notwithstanding any rule of law, statute or enactment of the Legislature to the contrary. A series of judicial decisions have determined the overriding effect of S. 3 making it amply clear that a grant of property by the Government partakes of the nature of law since it overrides even legal provisions which are contrary to the tenor of the document."
In 1973 (2) SCC 547=AIR 1973 S.C. 2520 -State of U.P.
v. Zahoor Ahmad, and following observations made by Hon'ble Apex
Court : --
"13. The lease in the present case was for the purpose of erecting a temporary rice mill and for no other purpose. The mere fact that the State is the lessor will not by (make?) it a Government grant within the meaning of the Government Grants Act. There is no evidence in the present case in the 24
character of the land or in the making of the lease or in the content of the lease to support the plea on behalf of the State that it was a grant within the meaning of the Government Grants Act.
15. In the present case the High Court correctly found on the facts that the Respondent after the determination of the leave held over. Even if the Government Grants Act applied Section 116 of the Transfer of Property Act was not rendered inapplicable. The effect of Section 2 of the Government Grants Act is that in the construction of an instrument governed by the Government Grants Act the court shall construe such grant irrespective of the provisions of the Transfer of Property Act. It does not mean that all the provisions of the Transfer of Property Act are inapplicable. To illustrate, in the case of a grant under the Government Grants Act Section 14 of the Transfer of Property Act will not apply because Section 14 which provides what is known as the rule against perpetuity will not apply by reason of the provisions in the Government Grants Act The grant shall be construed to take effect as if the Transfer of Property Act does not apply.
16. Section 3 of the Government Grants Act declares the unfettered discretion of the Government to impose such conditions and limitations as it thinks fit, no matter what the general law of the land be. The meaning of Sections and. 3 of the Governments Grants Act is that the scope of that Act is not limited to affecting the provisions of the Transfer of Property Act only. The Government has unfettered discretion 25
to impose any conditions, limitations, or restrictions in its grants, and the right privileges and obligations of the grantee would be regulated according to the terms of the grant, notwithstanding any provisions of any statutory or common law."
17. The position which therefore emerges is that after 31/12/1994
the Petitioners had/have no right to claim renewal and therefore, to
claim any right to continue in occupation of leased premises i.e. suit
land. She can always be evicted in accordance with law and
impugned order which seeks to resume the land in view of expiry of
whole/total period of lease of 90 years therefore cannot be faulted
with. The contention of Petitioner that as alienation has been
permitted under the Lease Dead, Petitioner would be covered by
definition of occupant class I by placing reliance upon unreported
Division Bench judgment of this Court (Nagpur bench) in bunch of the
writ petitions therefore is not relevant in present matter. Records show
that Petitioner did not have full occupancy rights and therefore right
to transfer the land itself. Reliance upon provisions of Section 337 of
MLR Code,1966 is also misconceived in present facts. In any case, such
contentions cannot be used to defeat the overriding effect given to
provisions of Government Grants Act. Petitioner herself states that she 26
has moved revenue authorities for changing her status as occupant
class I holder and according to her that request is still pending. The
pendency of said request has got no bearing on present matter and it
only shows that as on today, State Government has not recognised her
as occupant class I and hence matter needs to be viewed in the light of
provisions of Government Grants Act. It also needs to be mentioned
that Collector, Akola has rejected application of present Petitioner for
grant of full occupancy rights on 4/6/1985 observing that she would
get a right to transfer the land thereby and earn the profits from the
rise in the price thereof. This order has become final as it was not
challenged further by her. In view of expiry of lease period, the
question of breach also becomes irrelevant at this stage because the
effort of Respondent No. 4 and 5 was to have a review of the order
dated 29/1/1980 directing renewal of lease in favour of present
Petitioners till 31/12/1994. The impugned order passed on
14/6/1988 by Special Officer of State Government directed
resumption of suit land back by Government and history of litigation
ensuing thereafter has already come above.
27
18. The last renewal in favour of present Petitioner is from
year 1965 & on 29/1/1980 i.e. after provisions of Maharashtra Land
Revenue Code, 1966 came into force. As per Section 29 of MLR code,
Government Lessee is distinct class by itself separate from Occupant
class I & Occupant class II. The occupant class I holds an un-alienated
land in perpetuity and without any restrictions on right to transfer.
Immediately before coming into force of MLR code he has to hold the
land in full occupancy rights without any restriction on right to
transfer. The occupant class II is a person who holds un-alienated
land in perpetuity subject to restrictions on right to transfer. Section 2
(11) defines Government lessee to mean a person holding land from
government under lease provided by Section 38. That Section permits
Collector to lease under grant or contract any un-alienated unoccupied
land to any person for such period, for such purpose and on such
conditions as he may determine subject to rules made by State
Government. The last renewal in favour of Petitioner is in exercise of
this power under Section 38 and Petitioner has not disputed it.
Petitioner has failed to point out how she is trying to treat herself to be
Occupant class I. MP Land Revenue Code, 1954 in its section 2 (6)
defines Government Lessee to mean a person holding land from the 28
State Government under section 164 thereof. Subsection 20 of Section
2 defines tenure holder to mean person holding land from State
Government as Bhumiswami or Bhumidhari. It is not necessary to
refer to all these provisions in detail because Section 164 (1) of this
MP Land Revenue Code clearly states that a person who held land
from State Government or to whom right to occupy land was granted
by it and he was not entitled to hold that land as tenure holder was a
"government lessee" in respect of such land. The Petitioner was not &
never claimed to be a tenure holder. Section 164 (2) stipulates that
such Government Lessee held land in accordance with the terms and
conditions of the grant which is deemed to be a grant within the
meaning of Government Grants Act, 1895. Prior to this MP Land
Revenue Code, provisions of Berar Land Revenue Code, 1928 were
applicable and Section 53 and 54 dealt with disposal of unoccupied
land. The person who acquired a right to occupy land under Section
53 was called as occupant. Its Section 54 (2) provided that persons
holding agricultural land as occupants or held rights in un-alienated
nonagricultural land under the style of "occupant" or under lease
permitting them to hold it in perpetuity, were to be recognised as
occupants for Section 54. By this provision restrictions on their rights 29
inconsistent with Berar land Revenue Code were removed. As suit
land was never held in perpetuity by either the petitioner or her
predecessors, She can not be recognised as "occupant" for this or in
subsequent enactment including Section 337 of MLR Code. But then
in present facts, it is important to note that Section 55 (1) (d) of
Berar Code declared that provisions of Section 53 and Section 54
would not apply to land given out for industrial and commercial
purpose under the statutory rules framed in 1894. Therefore Petitioner
or her predecessors were never an "occupant". The land came to be
given to predecessor in title of present Petitioner in year 1905 for
industrial purpose. The same has to be presumed as according to
statutory rules of 1894 mentioned in Section 55 (1) (d) above. In fact
no arguments on these lines are advanced before me by Petitioner.
The very first agreement of lease executed in year 1905 shows that the
holder of lease had no right to erect any building or to make any
alteration in plot or to permit it to be used for any purpose other than
one for which the lease was granted. Such user for other purposes
enabled State Government to exercise right of re-entry as if there was
no demise. It is obvious that after coming into force of Berar Land
Revenue Code, 1928 , the Petitioner or her predecessor in title were 30
not and could not have been recognised as occupant. Section 55 (4)
of Berar Land Revenue Code, 1928 states that such persons were
called as lessees from Government or Crown and grant in their favour
was deemed to be a grant within the meaning of Crown Grants Act,
1895. This word "crown" has been later on replaced by word
"Government" and the Act has become Government Grants Act, 1895.
Thus in present matter the status of Petitioner is as Government Lessee
and her rights were regulated by Lease Agreements and provisions of
Government Grants Act. Thus, when Section 337 of Maharashtra Land
Revenue came into force as per earlier law i.e. M.P. Land Revenue
Code the petitioner was not occupant & hence, can not be treated as
occupant class-I as per law then in force in Vidarbha.
19. The consideration above is sufficient to show that questions of
any malafides on part of Respondent No. 5 or legality or otherwise of
intervention by Respondent No. 4 APMC are therefore rendered
academic after 1995 in present matter. In impugned order diversion
of land to other purposes by Petitioner to obtain personal gain for
herself by commercially exploiting its potential has been mentioned
and it has been found that it is necessary to resume the land back to 31
Government. In paragraph 8 the contention of APMC that after
1/1/1995 Petitioner has no right left in the suit land has been
mentioned and in operative part of the order it is also recorded that
renewal period granted by order dated 29/1/1980 has also expired
and those i.e. renewal orders are rendered meaningless and
infructuous. The breaches and commercial exploitation has been
found to be reason to deny any compensation to Petitioner.
Respondent No. 2 has observed that as Respondent No. 5 is tenant
having its ginning factory and dal mill on suit plot, proposal to give
that land to said Respondent No. 5 as per law should be submitted by
Collector. Similarly, Collector is directed to submit proposal for
allotting balance land to Respondent No. 4 APMC. Collector has also
been directed to make inquiry about encroachers and subtenants on
said land and to submit complete proposal in that respect. Earlier
Respondent No. 2 has found that after report about existing position is
received by the Government, rights of subtenants and demand, if any
made by APMC can be considered as per Rules. The order clearly
means that Collector has to submit appropriate proposal within the
framework of law and the land is being allotted in accordance with
provisions of MLR Code & Rules framed there under. The contention 32
that any favour is being shown either to Respondent number 4 or to
Respondent No. 5 is unsustainable when entire order is perused.
However by way of abundant precaution it is made clear that the
further allotment or grant, if any, of suit land resumed by State
Government shall be strictly within framework of law and as per
declared policy of State Government.
20. Subject to clarification as given above, I do not find any
merit in this Writ Petition. Same is accordingly dismissed with no
order as to cost. Rule discharged accordingly.
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