Skip to content


Shanker Prasad Goenka and anr. Vs. the State of Madhya Pradesh - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 308 of 1964
Judge
Reported inAIR1965MP153; 1965MPLJ51
ActsMadhya Pradesh Minor Mineral Rules, 1961 - Rules 18, 25, 25(1), 28, 29, 30 and 31; Mines and Minerals (Regulation and Development) Act, 1957 - Sections 3; Constitution of India - Article 226; Transfer of Property Act, 1882 - Sections 108
AppellantShanker Prasad Goenka and anr.
RespondentThe State of Madhya Pradesh
Appellant AdvocateR.S. Dabir, Adv.
Respondent AdvocateR.J. Bhave, Government Adv.
DispositionPetitions allowed
Cases ReferredRex v. Board of Education
Excerpt:
- - katni on the grounds that there are strong speculations in the proposed transaction. 12. if the lessee/lessees shall at any time during the said term use the said lands or any part thereof in any manner other than as authorised by this lease or fail to carry on quarrying operations continuously without sufficient cause of which the lessor shall be the judge or shall commit a breach of any condition of this lease it shall he lawful for the lessor to cancel this lease and take possession of the said lands or in the alternative to receive from the lessee/lessees such penalty for the breach not exceeding four times the amount of the said certain half-yearly rent as the lessor may fix. it was further contended that under clause (xvi) of rule 25(1) of the madhya pradesh minor mineral.....dixit, c.j.1. this order will also govern the disposal of miscellaneous petition no. 309 of 1964.2. by these two applications under article 226 of the constitution of india the petitioners seek writs of certiorari for quashing two orders passed by the state government, one on 20th february 1964 rejecting the petitioner shankar prasad goenka's application for the transfer of a lease for extraction of limestone to the other petitioner in miscellaneous petition no. 308 of 1964, namely, messrs t.c. bajan and co., private ltd. of katnf (hereinafter called the company) and another order passed on 7th april 1964 cancelling the lease for attraction of limestons granted to shanker prasad goenka, forfeiting the security deposit under the lease and requiring him to quit and deliver possession of the.....
Judgment:

Dixit, C.J.

1. This order will also govern the disposal of Miscellaneous Petition No. 309 of 1964.

2. By these two applications under Article 226 of the Constitution of India the petitioners seek writs of certiorari for quashing two orders passed by the State Government, one on 20th February 1964 rejecting the petitioner Shankar Prasad Goenka's application for the transfer of a lease for extraction of limestone to the other petitioner in Miscellaneous Petition No. 308 of 1964, namely, Messrs T.C. Bajan and Co., Private Ltd. of Katnf (hereinafter called the company) and another order passed on 7th April 1964 cancelling the lease for attraction of limestons granted to Shanker Prasad Goenka, forfeiting the security deposit under the lease and requiring him to quit and deliver possession of the lands covered by the lease.

3. The material facts are. that on 1st November 1961 Shankar Prasad Goenka was granted by ths State a quarry lease for the extraction of limestone in certain specified lands admeasuring 24.75 acres, situated in Mauia Amehta, Tahsil Muvwara, District Jabalpur, for a period of five wears commencing from 1st November 1961 and ending on 31st October 1966. On 4th March 1962 the leasee Geonka entered into an agreement with one Dorab Cawasji Bajan for the raising of limestone from the leased out area. Under that agreement Bajan was to engage all labour for the extraction of limestone at marked out places, use his own tools, machinery and materials, was to stack extracted limestone at the place or places selected by Goenka and was to receive payments at the rate of Rs. 20/.- per 100 Cft. of limestone raised. Bajan was made responsible for payment of wages, compensation amount and other emoluments 'payable under the law' to his labour and personnel. This agreement was to last for an initial period of two years. On 18th March 1962 Goenka entered into another agreement with the company in which Dorab Cawasji Bajan was a partner, for the sale of limestone at the rate of Rs. 30/- per 100 Cft. This contract contained clauses about drawing of bills, payment and delivery of limestone. Its duration was stated to be initially for a period of five years. The petitioner did not file copies of these agreements along with his two petitions. The State also did not file them along with their returns. But these agreements are to be found in the record of the matter which was placed before us. On 23rd July 1962 Goenka made a request in writing to the Government for being allowed to transfer his lease to the Company. He reiterated this request by another application to the Government on 9th March 1963. It has been stated in the return filed on behalf of the State that on receipt of these applications an enquiry was held by the Sub-divisional Officer, Katni, and it was found by him that the lessee had not maintained any accounts and had virtually transferred the lease to the Company by the two agreements he had concluded with the Company and Dorab Cawasji Bajan. The report of the Sub-Divisional Officer was forwarded to the Government through the Commissioner, Jabalpur Division, with his recommendation that the transfer application should be rejected and the lease should be cancelled as the lessee had not maintained account books, had virtually transferred the lease without obtaining the previous sanction of the lessor, and had thus committed a breach of conditions Nos. 5 and 12 of the lease. In the return it has been averred that the lessee was given full opportunity by the Sub-Divisional Officer, Katni, the Additional Collector, Jabalpur, and the Commissioner, Jabalpur Division, for producing his account books and explaining the agreements he had entered into with Dorab Cawasji Bajan and the Company. The petitioner however complains that no such opportunity was given. After the receipt of the report of the Commissioner, a notice was issued to the lessee Goenka on 20th February 1964 (Annexure A to the petition in Misc. Petition No. 309 of 1964) to show cause why the lease granted to him should not be determined as he had contravened Clauses 5 and 12 of the lease by failing to maintain proper accounts and transferring the lease to the Company without prior sanction of the State Government, The petitioner Goenka gave his reply on 24th February 1964 which did not satisfy the Government. Ultimately, the Government passed the impugned order on 7th April 1964 cancelling the petitioner Goenka's lease on the grounds stated in the show cause notice dated 20th February 1964. The lessee Goenka's application for a transfer of the lease was rejected by an order made on 30th February 1964 which ran as follows:

'State Government are pleased to reject the transfer application of Shri Shanker Prasad Goenka of Katni in respect of his quarry lease for lime-stone over an area of 24. 75 acres in mauza Amheta to M/s. T.C. Bajan and Co. Katni on the grounds that there are strong speculations in the proposed transaction.'

4. Before stating the submission of Shri Dabir, learned counsel appearing for the petitioners, it is necessary to refer to the material terms of the quarry lease granted to Shanker Prasad Goenka which are set out in Clauses 5, 9 and 12 of the lease deed. These clauses run as follows:

'5. The lessee/lessees shall at all times during the currency of this demise keep correct and intelligible books of account showing accurately the quantity of the said minerals extracted and the weight and value of the said minerals sold or exported together with the names of the purchasers or consignees and shall furnish to the Collector of Jabalpur not later than the 15th January, 15th April, 15th July and 15th October of every year a true and correct statement of the quantity of the said minerals extracted, sold, exported or otherwise disposed of during the preceding three months.

9. The lessee/lessees shall not assign or underlet the said lands or any part thereof or the rights or privileges therein hereby granted or any of them without the previous written sanction of the lessor and in the case of any such assignment or transfer sanctioned under this provision the instrument thereof shall within three calendar months from the date of its completion be produced to the Deputy Commissioner and the sum of Rs. 100 paid to the Collector as the fee for registration thereof in his office.

12. If the lessee/lessees shall at any time during the said term use the said lands or any part thereof in any manner other than as authorised by this lease or fail to carry on quarrying operations continuously without sufficient cause of which the lessor shall be the judge or shall commit a breach of any condition of this lease it shall he lawful for the lessor to cancel this lease and take possession of the said lands or in the alternative to receive from the lessee/lessees such penalty for the breach not exceeding four times the amount of the said certain half-yearly rent as the lessor may fix.'

5. It was argued by Shri Dabir that the quarry lease did not contain any clause prohibiting the lessee from employing contractors for the extraction of limestone and from entering into a contract with anyone for the sale of the extracted limestone; that the two contracts entered into by Goenka with Dorab CawasJI Bajan and the Company, whether taken singly or together, did not amount to any gontraot of assignment or subletting or underletting the leased out lands or transferring the lands or any right, title or interest therein either to Dorab Cawasji Bajan or to the Company; that the applicant had not, therefore, committed any breach of condition Nos. 9 and 12 of the lease; that the lessee had always maintained proper accounts of the quantity of the mineral extracted and sold that he had produced them before the income-tax and sales-tax authorities and had expressed his willingness to place them before the State authorities, but he was not given any opportunity for producing the account books; and that the accuracy and genuineness of his account books were never doubted or challenged anywhere. It was further contended that under Clause (xvi) of Rule 25(1) of the Madhya Pradesh Minor Mineral Rules, 1961 (hereinafter referred to as the Rules) a lease could not be determined straightway for the lessee's failure to maintain proper and correct accounts of the mineral extracted and sold; that according to the aforesaid clause where the lessee committed a breach of Clause (viii) of Rule 25(1) by failure to maintain proper and correct accounts, the State Government was first required to give a notice in writing to him asking him to remedy the breach within 30 days of the date of the notice and it was only if the breach was not remedied within this period that the State Government could, without prejudice to any other action, determine the lease and forfeit the whole or part of the security deposit; and that no such notice for remedying the breach said to have been committed by the lessee Goenka's failure to maintain accounts was given to him. Learned counsel proceeded to submit that condition 9 of the lease did not absolutely prohibit the lessee from assigning or underletting the leased out land or any part thereof or the rights and privileges therein; that it only provided that the lessee could not assign or underlet without the previous written consent of the lessor; that it was well settled that under such a condition the sanction or consent could not be withheld arbitrarily, unreasonably or vexatiously; that the discretion about the granting or withholding of the sanction had to be exercised according to rules of reason and justice and not by caprice or by arbitrariness; and that as the contracts concluded by the lessee with Dorab Cawasji Bajan and the Company did not in any way infringe any condition of the lease and did not amount to transfer or assignment of the lease or underletting of the leased out area, the lessee's application for the transfer of the lease to the Company could not be rejected on the ground that 'there were strong speculations in the proposed transaction'. To support his contention on the question of grant of sanction for the transfer of the lease learned counsel referred us to Bates v. Donaldson, 1896-2 Q. B. 241 and Sharp v. Wake-field, 1891 AC 173 at p. 179. Learned counsel also made a grievance that the lessee Goenka was not given any opportunity of hearing by the Sub-Divisional Officer, the Additional Collector and the Commissioner; that a copy of the Commissioner's report was not supplied to him; and that he was not given a personal hearing by the Government before the making of the Impugned orders against him.

6. It will be convenient to deal first with the question of the cancellation of the quarry lease. As is evident from the impugned order dated 7th April 1964, the lease was cancelled on two grounds, namely, first, that the lessee had transferred the lease to the Company without prior sanction of the State Government, and, secondly, that he had failed to maintain proper account of the mineral extracted. Taking first the ground of transfer of the lease without sanction, the opponent State's case is that though in law there was no assignment or transfer of the lease or underletting of the leased out land by an instrument executed by the lessee in favour of the Company, the two agreements entered into by the lessee with Dorab Cawasji Bajan and the Company virtually amounted to a transfer of the lease in violation of Rule 18 of the Rules and . condition No. 9 of the lease. We are unable to aecede to this contention. Rule 18 of the Rules, when it says that the 'lessee may, with the previous sanction of the State Government, assign, sublet or transfer his lease or any right, title or interest therein, to any person', clearly contemplates assignment, transfer or subletting in law. So also condition No. 9, when it speaks of assignment or underletting with the previous sanction of the lessor, prescribes the procedure for obtaining the sanction and directs that when an assignment or transfer is sanctioned, the instrument thereof shall be produced to the Deputy Commissioner and the sum of Rs. 100/- shall be paid to the Collector for registration of the instrument in his office contemplates that the transaction i.s an assignment, transfer or underletting in law. Rule 18 and condition No. 9 cannot be. construed as prohibiting a transaction which is not in law an assignment, transfer or underletting even if the practical effect of the transaction may be to enable a third person to extract the mineral on behalf of the lessee and to purchase it solely to the exclusion of others from the lessee. In the present case, the two contracts entered into by the lessee with Dorab Cawasji Bajan and She Company did not contain anything even remotely suggesting that under those contracts the lessee gave up, wholly or partly, his interest or rights and privileges under the lease. The contract between the lessee and Dorab Cawasji Bajan was a pure and simple contract for the extraction of the limestone, and for its stacking at nominated places, and for the payment which Bajan was to receive for the mineral extracted. By the other contract with the Company the lessee agreed to sell to the Company for a period of five years all the limestone extracted at a certain rate. The Rules nowhere preclude the lessee from entering into such contracts for the raising and extraction of the limestone and for its sale. No such prohibition is to be found even in the lease.

7. Learned Government Advocate did not contend that the effect of the two agreements concluded by the lessee with Dorab Cawasji Bajan and the Company was that in law there was an assignment or transfer of the lease. What he urged was that in substance and reality there was a transfer of the lease inasmuch as Dorab Cawasji Bajan, a partner of the Company, raised the limestone, the Company was to purchase the entire limestone for a period of five years, all the accounts of the mineral extracted and sold were maintained by Dorab Cawasji Bajan and the Company, and all payments to labourers were made by Dorab Cawasjf Bajan. It was submitted that the lessee resorted to the two agreements just to evade the bar imposed by Rule 18 of the Rules and condition No. 9 of the lease; and that if such transactions, in regard to the extraction of the mineral and its sale were to be recognised as valid, the object of Rule 18 and condition No. 9 would be defeated. We are not persuaded by the argument advanced by the learned Government Advocate to hold that for the purposes of Rule 18 and condition No. 9 of the lease the substance and practical effect of the transaction and not its legal position, should be taken into account. It would be altogether a wrong approach. in principle to look beneath a transaction which is legal, competent, regular and in conformity with the Rules and conditions of the lease and to regard it as prohibited by Rule 18 or condition No. 9 by speculations as to the motive or a scheme for defeating the rule and the condition. If the Rules or the conditions of the lease leave an easy loophole for evading the prohibition of assignment, transfer or subletting without the previous sanction of the lessor, then the proper course to adopt is to amend the Rules and the conditions so as to prevent the evasion. For stopping the evasion complained of by the learned Government Advocate, a transaction which is legal, competent, regular and in form cannot be rewritten by this Court and made a transaction of assignment, transfer or underletting; nor can the terms 'assign', 'transfer' or 'sublet' be taken to connote anything other than what they mean in law.

8. In our judgment, the lessee Goenka did not in any way transfer or assign the lease or underlet it by executing the two agreements with Dorab Cawasji Bajan and the Company and did not commit any breach of Rule 18 or condition No. 9. As neither the Rules nor the conditions of the lease prohibit the lessee from employing a contractor for extracting limestone and from selling the extracted material exclusively to one person or body, it cannot be said that the lessee used the leased out land or any part thereof in any manner other than authorized by the lease and infringed condition No. 12 of the lease. That being so, the ground given by the State Government that the lessee had transferred the lease to another person without prior sanction of the lessor was without any foundation and altogether untenable.

9. The cancellation of the lease on the ground that the lessee had failed to maintain proper accounts of the mineral extracted was also purported to be in the exercise of the power conferred on the lessor by condition No. 12 of the lease. It may be mentioned here that in the impugned order dated 7th April 1964 cancelling the lease it was stated that the lease was cancelled in exercise of the powers conferred under Clause 16 of the lease deed. But, as stated in the return the reference to Clause 16 was a mistake which was later on corrected. The cancellation of the lease on the above ground, though purported to be in exercise of the powers conferred by Clause 12 of the lease deed, was really in violation of Clause (xvi) of Rule 25(1) of the Rules. The lease that was granted to the lessee Shanker Prasad Goenka was for the extraction of limestone which under Notification No. G. S. R. 436, dated 1st June 1958, published in the Gazette of India, Extraordinary, Part II Section 3(1), No. 79, dated 1st June 1958, issued by the Central Government in exercise of the powers conferred on it by Clause (e) of Section 3 of the Mines and Minerals (Regulation and Development) Act, 1957, is a minor mineral. The lease was granted under the Madhya Pradesh Minor Mineral Rules, 1961, framed by the State Government under the Act just referred to above and was subject to those statutory rules. Rule 25(1) provides that every quarry lease shall be subject to the conditions enumerated in that rule. Clause (viii) of Rule 25 lays down thai the lessee shall keep correct accounts showing the quantity and other particulars of all minerals obtained from the mine datewise, quantifies of despatches from the lease hold, the price obtained for such minerals, the name of the purchasers and other particulars mentioned in that clause. Clause (xvi) of Rule 25 says, inter alia that in case of breach by the lessee of the conditions specified in Clause (viii) the State Government shall give notice in writing to the lessee asking him to remedy the breach within thirty days from the date of the notice, and if the breach is not remedied within such period, the State Government without prejudice to any other action, may determine the lease and forfeit the whole or part of the security deposits. It is plain from the language of Clause (xvi) that a lease cannot he determined on the ground of the failure of the lessee to keep correct accounts as provided by Clause (viii) unless and until a notice is first given to the lessee to remedy the breach of Clause (viii) within 30 days from the date of the notice and if the lessee fails to remedy the breach within that period. In the present case, admittedly, no such notice was given to the lessee Goenka. Learned Government Advocate did not say before us that any such notice was given to the lessee, and in the return also there is no statement to that effect Learned Government Advocate, however, suggested that Clauses (viii) and (xvi) bad no applicability where there was a total failure to maintain accounts and that those clauses applied only when some accounts had been kept but they were not correct. We are unable to accede to this contention which leads to the anomaly of no action of any kind against the lessee being permissible if he totally fails to maintain accounts but the lessee being subjected to the peril of action under Clause (xvi), including determination of the lease and forfeiture of his security deposit, if he maintains some sort of accounts which are not correct. The cancellation of the lease on the ground of failure to maintain accounts was thus clearly contrary to the provisions of Clause (xvi) of Rule 25. If cannot be supported even with reference to conditions Nos. 5 and 12 of the lease deed which were referred to in the impugned order dated 7th Apri] 1964. The lease being under the Madhya Pradesh Minor Mineral Rules, 1961, and being subject to the conditions mentioned in Rule 25, any condition inserted in the lease deed contrary to Clauses (viii) and (xvi) of Rule 25 for the cancellation of the lease on the ground of failure to maintain proper or correct accounts would be invalid. Condition No. 5 was concerned only with the keeping of correct and intelligible books of accounts. It did not provide for the cancellation of the lease in the event of the failure to comply with that condition. Condition No. 12 no doubt gave to the lessor the power to cancel the lease in the event of the lessee committing a breach of any condition of the lease. But this power of cancellation in the case of a breach of condition No. 5 relating to the keeping of accounts, besides being a superfluity in the face of Clauses (viii) and (xvi) of Rule 25, could be exercised only in conformity with Clause (xvf) of Rule 25. If condition No. 12 purported to give to the lessor the power to cancel the lease on the ground of the failure of the lessee to keep correct accounts contrary to Clause (xvi) of Rule 25, then that condition to the extent it conflicts with Clause (xvi) is invalid. The cancellation of the lease on the ground of the petitioner-lessee's failure to maintain accounts, though referred to in the impugned order as an action in the exercise of powers conferred by condition No. 12, was in law under Clause (xvi) of Rule 25 but was not in conformity with that clause and was thus illegal and in breach of the statutory rule, namely, Rule 25(1) (xvi).

10. Shri Bhave, learned Government Advocate, urged that the action of the State in cancelling the lease on the grounds it did was in the exercise of the powers conferred by condition No. 12 of the lease deed and was administrative in character; and, therefore, even if the cancellation of the lease was contrary to the terms of the lease a writ of certiorari could not he issued for quashing this administrative decision of the State Government; and that the lessee's proper remedy was to file a suit for damages or for specific performance of the contract of lease. The argument would have had some validity if the cancellation of the lease had been founded solely on the ground that the lessee Goenka by concluding the two agreements with Dorab Cawasji Bajan and the Company had transferred or assigned the lease without obtaining the previous sanction of the lessor. But, as is evident from the impugned order dated 7th April 1964 under challenge, the lease was cancelled on two grounds, namely, failure to maintain proper accounts of the mineral extracted and transfer of the quarry lease to the Company without prior sanction of the lessor, that is, the State Government. It is true that Rule 18, which deals with assignment or transfer of a lease with the previous sanction of the State Government, does not itself say anything about the cancellation of the lease if an assignment or transfer is effected without the requisite sanction of the State Government. In fact, there is no specific provision in that behalf in the Rules. But Rule 25(3) of the Rules provides that a quarry lease may contain any other special conditions as may be specified by the State Government. Under this provision it is open to the State Government to embody in the lease deed a special condition which is not inconsistent with the Rules. Condition No. 12, therefore, in so far as it enables the lessor to cancel the lease on a breach of condition No. 9 prohibiting assignment or transfer without the previous written consent of the lessor, is a valid condition and the cancellation of the lease in the exercise of this power given by condition No. 12 may be said to he an action taken in the exercise of the power conferred on the lessor by condition No. 12. But the same cannot be said of the cancellation of the lease on the ground of the lessee's failure to maintain proper and correct accounts. Earlier, we have endeavoured to point out that the matter of the cancellation of the lease on the ground of the lessee's failure to keep correct accounts is a matter governed by Clauses (viii) and (xvi) of Rule 25 of the Rules framed under the Mines and Minerals (Regulation and Development) Act, 1957. Thus, an order cancelling the lease on the ground of failure to keep correct accounts cannot but be regarded as an order made by the State Government in the exercise of its powers conferred by Clause (xvi) of Rule 25. It is noteworthy that under Rule 28 a review is provided against any order made by the State Government in exercise of the powers conferred on it by the Rules. According to Rule 29 when an application for review is made under Rule 28 the State Government may confirm, modify or set aside the assailed order or pass such order in relation thereto as it may deem just and proper. Rule 30 gives to the State Government the power to review suo motu any order passed by itself under the Rules. Then Rule 31 enjoins that no order under Rule 29 or Rule 30 shall be passed against any person interested unless he has been given an opportunity to represent his case. These provisions unmistakably show that in cancelling a lease under Clause (xvi) of Rule 25 on the ground of the lessee's failure to maintain proper accounts the State Government discharges a quasi judicial function and not merely an administrative one. Even if it be assumed that the cancellation of the lease on the ground of the lessee's failure to keep proper accounts is an executive act, still inasmuch as the act can be done only after certain conditions mentioned in Clause (xvi) of Rule 25 are satisfied, the validity of the act can be assailed in proceedings under Article 226 if the conditions are not fulfilled, (See Municipal Committee. Seoni v. State of M. P., 1961 MPLJ 667: (AIR 1962 Madh Pra 40)). Now, the impugned order dated 7th April 1964 cancelling the petitioner Goenka's lease rests on two grounds, namely, his failure to maintain proper accounts and the alleged transfer of the quarry lease to the Company without prior sanction of the State Government. It is not a speaking order and it is impossible to say from it how far one or the other of the two grounds influenced the Government and effectively operated to bring about the decision in regard to the cancellation of the lease. It follows, therefore, that if the cancellation of the lease on the ground of failure to maintain proper accounts was illegal as being contrary to Clause (xvi) of Rule 25, the entire order dated 7th April 1964 itself is vitiated, as it is impossible for the Court to say that it was the alleged transfer of the lease that was the valid reason for cancelling the lease. It cannot be disputed seriously that this Court can by the issue of a writ of certiorari quash the decision of the Government to cancel the lease on the ground of the lessee's failure to maintain proper accounts if that decision is contrary to the provisions of Clause (xvi) of Rule 25.

11. Coming now to the question of the rejection of the lessee Goenka's application for being allowed to transfer the lease to the Company, the position is that Rule 18 of the Rules gives to the lessee the option to assign, sublet or transfer his lease or any right, title or interest therein to any person, and he can do so if he obtains the previous sanction of the State Government for it. Condition No. 9 of the lease only puts in a negative and prohibitory form the provision contained in Rule 18. In regard to a provision or a covenant in a lease of this description the law is well settled that the lessor is not entitled to refuse sanction or consent for wholly extraneous reasons and the grounds for refusal should have a rational connection with the property actually leased or the character of the proposed transfer or the assignee or the sublessee; that the lessor cannot withhold the sanction for obtaining some collateral advantage or for imposing on the intended assignor or transferor any greater burden that had been imposed by the lease; and that the sanction cannot be withheld arbitrarily or vexaliously. The law on the point has been expounded by the Court of Appeal in Houlder Brothers and Co. v. Gibbs, 1925-1 Ch 575 at pp. 582-583 where the Master of the Rolls cited with approval the following observations of Smith L. J. in 1896-2 Q. B. 241 (supra):

'It is not, in my opinion, the true reading of this clause that the permission can be withheld in order to enable the lessor to regain possession of the premises before the termination of the term. It was in my judgment inserted alio intuitu altogether, and in order to protect the lessor from having his premises used or occupied in an undesirable way or by an undesirable tenant or assignee, and not in order to enable the lessor to, if possible, coerce a tenant to surrender the lease so that the lessor might obtain possession of the premises.'

12. Here, the order dated 20th Feb. 1964 of the Government by which the lessee's request for being allowed to transfer the lease to the Company was rejected mentioned 'strong speculations in the proposed transaction' as a ground for refusing sanction. We must confess our inability to understand what precisely the Govt. meant when it rejected the lessor's prayer for sanction on the ground 'that there are strong speculations in the proposed transaction.' In the return filed on behalf of the opponent in Misc. Petition No. 308 of 1964 the refusal of sanction is sought to be justified on the ground that the lessee had entered into two agreements with Dorab Cawasji Bajan and the Company and had virtually transferred the lease in violation of Rule 18 and condition No. 9 of the lease. It has also been averred therein that the matter of granting sanction for assignment or transfer is discretionary and administrative in character and the lessee cannot as of right claim that he should be allowed to transfer or assign the lease. If the return is any guide to the meaning of the expression used in the order dated 20th February 1964, namely, 'there are strong speculations in the transaction', it is clear that the Government refused sanction for the transfer of the lease solely because it thought that the lessee had attempted to evade Rule 18 and condition No. 9 of the lease-deed by concluding the two agreements, that he did with Dorab Cawasji Bajan and the Company. If, as pointed out by us earlier, these two agreements were legal, competent and regular, and did not in any way constitute an infringement of Rule 18 or condition No. 9 of the lease deed then the very basis of the rejection of the lessee's prayer to the Government for being allowed to transfer the lease disappears; and it must be taken that in the eye of law the State Government did not at all exercise the power and discretion given to it by Rule 18. It is no doubt true that a writ of mandamus cannot be issued for controlling the discretionary power vested in an authority or for directing it to exercise its discretion in a particular way, but where the authority fails to exercise any discretion at all and declines jurisdiction, then it can be compelled by a writ of mandamus to exercise the discretion vested in if

In this connection it would be sufficient to refer to Rex v. Board of Education, (1910) 2 KB 165, where the Court of AppeaJ quashed by issuing a writ of certiorari a decision of the Board of Education under Section 7 of the Education Act, 1902, on the ground that the Board of Education on a wrong construction of the Act failed to answer the real question submitted to them but answered a different question. The Court of Appeal, holding that the Board of Education had declined jurisdiction, issued a writ of mandamus directing the Board to determine the question according to law. Here also, the State Government, by a wrong construction of the two agreements concluded by the lessee Goenka with Dorab Cawasji Bajan and the Company, failed to exercise at all the discretion given to it by Rule 18 and decide whether according to the settled principles of exercise of discretion in the matter of sanction the lessee should or should not be allowed to transfer the lease to the Company. The decision dated 20th February, 1964 of the State Government rejecting the petitioner Goenka's prayer for being allowed to transfer the lease to the Company cannot, therefore, be sustained. In the circumstances, stated above, the lessee's application for sanction must he regarded as still pending and the State Government must dispose it of according to law.

13. For the foregoing reasons our conclusion is that the orders, dated 7th April, 1964 and 20th February, 1964 of the State Government cannot be allowed to stand and must be quashed.

14. The result is that both the petitions are allowed. The two aforesaid orders are quashed by issue of writs of certiorari and the State Government is directed to determine according to law the lessee's Shanker Prasad Goenka's application for being allowed to transfer the lease to Messrs. T.C. Bajan and Co. of Katni. The petitioner Goenka shall have costs of the two applications. Counsel's fee in each case is fixed at Rs. 150. The outstanding amount of the security deposit shall be refunded to the petitioners in both the cases.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //