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Jasbhai Motibhai Desai vs Roshan Kumar, Haji Bashir Ahmed & ... on 19 December, 1975
Jayanta Jadav vs The State Of West Bengal on 28 February, 1974
Godde Venkateswara Rao vs Government Of Andhra Pradesh And ... on 11 October, 1965
The Companies Act, 1956
Satyanarayana Sinha vs M/S S. Lal And Company (Pvt.) Ltd on 10 September, 1973

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Calcutta High Court
Damodar Ropeways & Construction ... vs The Kolkata Muncipal Corporation ... on 12 April, 2010
Author: Soumitra Pal

WP No. 15 of 2009

IN THE HIGH COURT AT CALCUTTA

Constitutional Writ Jurisdiction

ORIGINAL SIDE

DAMODAR ROPEWAYS & CONSTRUCTION COMPANY P. LTD. & ORS. Versus

THE KOLKATA MUNCIPAL CORPORATION & ORS.

For Petitioner : Mr.Jishnu Saha, Advocate with Mr.A.Banerjee,Advocate. For Respondent : Mr.Alok Ghosh,Advocate with Mr.S.K.Debnath. BEFORE:

The Hon'ble JUSTICE SOUMITRA PAL

Date : 12th /13th April, 2010.

The Court : In the writ petition, the petitioners stated to be companies incorporated under the provisions of the Companies Act, 1956 and its directors, have prayed for a direction upon the authorities of the Kolkata Municipal Corporation from giving any effect to the order dated 14th June, 2008 communicated by letter dated 2nd September, 2008 issued by the Kolkata Municipal Corporation, the respondent no.1 2

dropping the matter for the time being regarding the execution of the lease deed regarding the strip of land measuring about 5 ½ kathas ("the strip of land" in short) in front of premises No.14A D.L.Khan Road, Kolkata- 700025 ( in short the "said premises"). Prayer has been made to forthwith grant lease of the said strip land in front of the said premises in favour of Royal Calcutta Turf Club, an unincorporated members' club and Turf Properties Private Limited, respondent nos. 6 and 7 respectively. Incidentally, the respondent no.7 is a company promoted by the respondent no.6 for, inter alia, for holding its immovable properties which include the said premises. Prayer has also been made for a direction upon the Corporation to accept from the respondent nos.6 and 7 and/or the petitioners the plan for construction of the building on the said premises taking into account the FAR of the said strip of land and to sanction the same.

The facts as stated in the writ petition are that the respondent nos.6 and 7 came across an advertisement published by the respondent no.1, inviting offers for sale of flats proposed to be constructed on the strip of land in front of the said premises. A writ petition being W.P.No.2862 of 1994 was filed by the respondent no.6 against the respondent no.1 praying for a direction upon the respondent no.1 not to construct a building in front of the said premises. On 30th September, 1994 the said writ petition 3

was moved and an order of injunction was passed restraining the respondent no.1 from making any construction on the strip of land in front of the said premises. On 17th September, 1994 the interim order was vacated.

Being aggrieved, the respondent nos.6 and 7 filed an appeal being APO No.729 of 1994. In the opposition to the application filed in the said appeal, the respondent no.1 filed an affidavit stating that in the event of not being able to carry out construction on the said strip of land, it would suffer financial loss. This sparked of the possibility of a settlement between the respondent nos.6 and 7 and the respondent no.1 for acquiring the said strip of land. In such circumstances, the respondent nos. 6 and 7 went ahead with the discussion for settling the matter with the respondent no.1 and on the other hand, the respondent nos.6 and 7 commenced discussion with the petitioner no.l for funding such acquisition. In course of such discussion and negotiation with the petitioner no.1, the respondent nos.6 and 7 agreed in principle to enter into commercial agreements in respect of the said premises and the said strip of land subject to the petitioner no.1 agreeing to fund for acquiring the said strip of land from the respondent no.1. It has been stated that in between November, 1995 and April, 1996 it had became apparent that the respondent no.1 was not averse to the transfer of the land to the respondent nos.6 and 7. On 26th April, 1996 the 4

respondent nos.6 and 7 entered into an agreement with the petitioner no.1 for development of the said premises taking into account the lease of the said strip of land. According to the petitioner, a report was prepared by the respondent no.1 relating to the allotment of the strip of land to the respondent nos.6 and 7 which was recommended by the Mayor-in-Council and was subsequently approved by the Mayor. Thereafter, the respondent no.1 by letter dated 12th February, 1997 wrote to the respondent nos. 6 and 7 recording that it had decided that the said strip of land might be allotted to the respondent nos. 6 and 7 on certain conditions which included that a sum of Rs.64 lakhs would have to be paid by the respondent nos.6 and 7 and the respondent nos.6 and 7 would be required to keep the said strip of land vacant but would be permitted to utilize the FAR of the same so far as the premises is concerned. According to the petitioner, during the pendency of the appeal before the High Court, the respondent no.1 made certain promises as evident from the letter dated 12th February, 1997 and 18th March, 1997 and in view of such promises, the petitioner no.1 agreed to provide a sum of Rs.64 lakhs to the respondent nos.6 and 7 for onward payment to the respondent no.1. Accordingly, during hearing of the appeal before the Division Bench the respondent nos.6 and 7 agreed to pay Rs.64 lakhs for obtaining 99 years' lease of the vacant strip of land. Thereafter, on 20th May, 1997 the 5

Division Bench disposed of the appeal by directing the appellants therein to pay a sum of Rs.64 lakhs within 30th June, 1997 along with the draft lease agreement and the respondent no.1 was directed to execute the necessary deed of lease in respect of the said strip of land within two months from the date of receipt of money and the draft lease. The said order further provided that the appellants therein would thereafter be at liberty to submit a plan for construction of a building thereon and directed the respondent no.1 to dispose of the plan on the basis of existing rules within a period of three months from the date of its submission. According to the petitioner, on the faith of the promises and representations made by the respondent no.1 by letters dated 12th February, 1997 and 18th March, 1997 and on further faith on the representations made by the Corporation before the Division Bench which prompted the passing of the order dated 20th May, 1997 and also on the basis of the undertakings of the respondent no.1 to act in terms of the directions contained therein, the petitioner paid a sum of Rs.64 lakhs to the respondent nos. 6 and 7 for onward payment to the respondent no.1 for lease of the vacant strip of land. On 28th June, 1997, the respondent nos. 6 and 7 in turn paid Rs.64 lakhs to the respondent no.1 which was acknowledged. The petitioner no.1 got the draft deed of lease prepared which was forwarded to the respondent nos. 6 and 7, who on 28th June, 1997, made over the same to the 6

respondent no.1. According to the petitioner, on 18th July, 1998 the legal department of the respondent no.1 approved the draft deed of lease. Thereafter, a plan for construction of a building on the said premises using, inter alia, FAR of the said strip of land was prepared. No objection certificates were applied for and were obtained by the petitioner no.1 in the name of the respondent nos. 6 and 7 from the Bharat Sanchar Nigam Limited and from the Deputy Commissioner of Police. It has been stated that in view of the express promises and representations of the respondent no.1 to grant lease in favour of the respondent nos. 6 and 7 of the said strip of land, on 13th March, 1999, the possession of the same was handed over by the respondent no.1 to the respondent nos. 6 and 7. The petitioner no.1 took steps to rehabilitate the families who were occupying the diverse structures on the said premises. Upon shifting of such staff members of the respondent nos. 6 and 7, on 18th June, 2004 the respondent nos.6 and 7 ultimately made over to the petitioner no.1 the vacant possession of the said premises along with the strip of land. After getting possession, in March, 2008 the petitioner undertook soil test. The petitioner no.1 got a new building plan prepared and obtained no objection certificate from the Kolkata Improvement Trust in the name of the respondent nos. 6 and 7. However, a new building plan could not be submitted due to the non- execution of the lease deed of the said strip of land in favour of the 7

respondent nos. 6 and 7. According to the petitioner, in view of the direction of the Division Bench and since all along the respondent authorities were fully aware of the involvement of the petitioner no.1 in the proposed project at the said premises and in the acquisition of the vacant strip of land and in view of the promises of the respondent no.1 to grant both lease of the vacant strip of land and to allow the FAR, as on the basis of promises and being induced, the petitioner no.1 had agreed to enter into commercial dealings with the respondent nos.6 and 7 and as the respondent nos. 6 and 7 and the petitioner no.1 did so in the legitimate expectation that the respondent no.1 would perform its promises to grant lease of the vacant strip of land particularly in view of the fact that the respondent no.1 had received the entire consideration of Rs.64lakhs, the respondent no.1 is estopped and precluded from delaying the execution and registration of the lease of the said strip of land. Submission is the letter dated 29th February, 2008 issued by the respondent no.1 enquiring as to whether the respondent nos. 6 and 7 were agreeable to pay a sum of Rs. 60,000/- per annum was contrary to its promises. According to the petitioner, though repeated representations both written and oral were made by the respondent nos. 6 and 7 and the petitioner, reply is yet to be received. However, by letter dated 2nd September, 2008 the respondent no.1 had intimated that in a meeting held on 14th June, 2008 the matter 8

regarding execution of lease in respect of the vacant strip of land had been dropped. According to the petitioner, in view of the events that followed making of such promises and representations made by the respondent no.1 and as on the basis of such promises and representations, agreements were entered into between the petitioner no.1 and the respondent nos. 6 and 7 in the expectation that such promises would be performed by the respondent no.1, the entire action of the respondent no.1 in issuing the letter dated 2nd September, 2008 dropping the issue relating to execution of the lease deed is wrongful, illegal, arbitrary and in violation of the principles of natural justice and is violative of the fundamental rights enshrined under Articles 14, 19(1)(g) and 300A of the Constitution of India.

The matter was moved on 19th January, 2009 when directions were issued for filing of affidavits. Affidavits have since been exchanged and are on record.

Learned advocate for the petitioner relying on the statements in the writ petition has submitted that from the tenor of the order passed by the Division Bench it is evident that there was a concluded contract. Though the petitioners were not officially part of the negotiations, however, there was no fetter on assignment. Submission is, in view of the promises and representations and as draft lease was approved by the respondent no.1 9

and as the petitioner no.1 acquired a secondary interest though not a pecuniary interest pursuant to the agreement with the respondent no.7 in favour of the petitioner, the writ petition is maintainable and the petitioners are entitled to the reliefs as prayed for. It is submitted that since the petitioners by letter dated 2nd September, 2008 have come to learn that the matter regarding grant of lease of the vacant strip of land has been dropped, there has been no delay. Assuming, cause of action arose after the order dated 20th May, 1997 was passed by the Division Bench, however, there was no laches in moving the writ petition in view of the written representations by the respondent no.1 regarding the grant of lease which ultimately culminated in the impugned communication dated 2nd September, 2008. It is submitted that the respondent no.1 being a state cannot act as a private individual on the plea that it is a contractual matter and fair play is expected from the authorities. Learned senior advocate appearing on behalf of the respondent nos.6 and 7 has adopted the submission of the petitioner.

Learned advocate appearing on behalf of the Kolkata Municipal Corporation has submitted that the petitioners do not have the locus standi to move the writ petition since they have failed to demonstrate that any legal right has been violated by the respondent no.1. Since the actions of the respondent no.1 are not statutory and private in nature, they do not 10

come within the ambit of the writ jurisdiction. That apart neither lease agreement was approved nor there was any concluded contract between the respondent nos.6 and 7 and the respondent no.1. Further, the respondent no.1 was not a party to the commercial agreements between the petitioner no.1 and the respondent nos.6 and 7. Submission is though Rs.64 lakhs was paid and receipt was granted in favour of the respondent no.6, the respondent no.1 is not at all concerned who had paid the said sum of Rs.64 lakhs to the respondent nos.6 and 7. Moreover, there is nothing on record that the draft lease was approved by the respondent no.1 or the petitioners were parties to the negotiations between the respondent nos.6 and 7 and the respondent no.1. Submission is promises, if at all, or representations cannot be the basis for moving the writ petition. Admittedly, the respondent no.1 had issued an advertisement for building a housing complex on the said strip of land. Thereafter, a writ petition having W.P.No.2862 of 1994 was filed by a steward of the respondent no.6. Therein order was passed and injunction was granted which was subsequently vacated. Thereafter, appeal was preferred which was ultimately disposed of on 20th May, 1997 by the following order:- "The Court: During the pendency of the matter, the Calcutta Municipal Corporation has agreed to allot a strip of land in front of the petitioner's 11

land at No.14A D.L.Khan Road for a lease for 99 years as indicated by the letter dated 12.2.97 on payment of Rs.64 lacs (sixty four lacs). Accordingly, this matter is disposed of by directing the appellant- petitioner to pay a sum of Rs.64 lacs to the Calcutta Municipal Corporation within 30th June, 1997 along with the draft lease agreement and the Calcutta Municipal Corporation shall execute necessary deed of lease within a period of two months from the date of receipt of the money and the draft lease. Thereafter, the petitioner will be at liberty to submit a plan for construction of the house thereon which should be dealt with and disposed of by the Calcutta Municipal Corporation on the basis of the existing rules within a period of 3 months from the date of submissions of such plan.

The appeal, the stay application and the writ petition all are disposed of accordingly."

Subsequently, as evident from the writ petition, a sum of Rs.64 lacs was paid by the respondent nos.6 and 7 to the respondent no.1 and draft lease deed was forwarded by the respondent nos.6 and 7 to the respondent no.1. Thereafter, correspondences took place between the respondent no.6 and the respondent no.1. Admittedly, the draft lease till date has not been approved. Admittedly, there has been no concluded contract between the 12

respondent nos.6 and 7 and the respondent no.1. However, according to the petitioners on the promise and representation held out by the respondent no.1 they had advanced money to the respondent nos.6 and 7 and had entered into an agreement for sale. Incidentally, it appears from the affidavit-in-opposition filed by the respondent nos.6 and 7 that on 30th August, 2007 an agreement for sale and a deed of assignment were entered into by the petitioner and the respondent nos.6 and 7. Now looking at the annexures to the writ petition I find that there is nothing on record to demonstrate that at any point of time the petitioners were parties to the negotiations between the respondent nos.6 and 7 and the respondent no.1. In fact, there is an implied admission on the part of the petitioners that they were not parties to the negotiations. Moreover, no record has been produced by the petitioners that the respondent no.1 was a party to the negotiations between the petitioners and respondent nos. 6 and 7. Therefore, it is not understood how the statements could be made in paragraph-17 of the petition that "..As such, at all material times the respondent authorities were also aware of the acts, deeds and things done by the respondent nos.6 and 7 and the petitioner No.1 being induced by and on the basis of the express promises and representations made by the respondent no.1 to grant a lease of the said 5 ½ cottahs strip of land in front of the premises No.14A D.L.Khan Road, Kolkata- 700025 and consequently 13

of their having substantially altered their position to their detriment on the basis thereof." Further the statement "Similarly, it is on the basis of such promises and being induced thereby that the petitioner No.1 agreed to enter into commercial dealings and transactions with the respondent nos. 6 and 7 in respect of premises No. 14A, D.L. Khan Road, Kolkata - 700 025 and to make huge financial commitments on the basis thereof. " is without any basis whatsoever. Therefore, if the petitioners were not part of negotiations at any stage, it is surprising what entitle them to move the writ petition more so when there is no concluded contract between the respondent nos.6 and 7 and the respondent no.1. If the petitioners have entered into commercial dealings and transactions with the respondent nos.6 and 7, they have done so at their risk and peril. It is not understood how the petitioners have acquired any interest as argued. The submission that the respondent no.1 an authority cannot act as a private individual in the realm of contract, and fair play is expected, cannot be accepted as all along the petitioners were nowhere in the picture. The judgement in the case of Jayanta Kumar Banerjee v. State of West Bengal and others : AIR 1981 Calcutta 138 relied on by the petitioner is not applicable as therein the Board of Graham's Homes being owners had agreed to sell the property, whereas in the case in hand the respondent nos. 6 and 7 are not the owners of the strip of land. The judgement of the Apex Court in 14

Venkateswara Rao v. Government of Andhra Pradesh : AIR 1966 SC 828 does not further the case of the petitioner since as evident from paragraph-8 of the judgement, the appellant therein represented the village in all its dealings with the Block Development Committee and Panchayet Samity in the matter of location of the primary health centre and was held to be a representative of the committee which was in law the trustees of the amounts collected by it from the village for public purpose, unlike in the case in hand where the petitioners were never parties to the negotiations. The judgement in the case of S.Sinha v. S.Lal & Co. : AIR 1973 SC 2720 is not applicable as the petitioners cannot complain of infraction of right as they were not parties to the proceedings. In the case of J.M.Desai v. Roshan Kumar : AIR 1976 SC 578 it has been held that the scope and the meaning of the term "aggrieved person" depend "on diverse, variable factors such as the content and intent of the statute of which contravention is alleged, the specific circumstances of the case, the nature and extent of the petitioner's interest, and the nature and extent of the prejudice or injury suffered by him." In the case in hand since I find from the facts that the petitioners were not parties to the proceedings, it does not support the case of the petitioner. Therefore, in my view, the writ petition is vexatious and has no merit. Thus, the petitioners have no locus standi to move the writ petition. Hence, the writ petition is dismissed. In 15

the facts and circumstances of the case, the respondent no.1 is entitled to costs which is assessed at Rs.5,100/-.

Urgent photostat certified copy of this judgement and order, if applied for, be furnished to the appearing parties on priority basis. (SOUMITRA PAL, J.)

ssaha

AR(C.R.)