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K.C. Rout Vs. State of Orissa and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtOrissa High Court
Decided On
Case NumberO.J.C. No. 959 of 1977
Judge
Reported inAIR1979Ori120; 47(1979)CLT407
ActsConstitution of India - Article 226; Transfer of Property Act, 1882 - Sections 108; Evidence Act, 1872 - Sections 115
AppellantK.C. Rout
RespondentState of Orissa and anr.
Appellant AdvocateG. Rath, Adv.
Respondent AdvocateGovernment Adv.
DispositionPetition allowed
Cases ReferredUnion of India v. Anglo Afgan Agencies
Excerpt:
.....to deposit the amount of rupees 1,65,000/- as a condition precedent. in the meantime, the state government had changed its mind on the representation of the co-operative society and by order dated 29-6-1976, government decision was communicated to the effect that the fishery should be settled with the society on condition that the society should make good the deficiency of the earlier year and undertake to pay the sum of rs. 1 was not maintainable (ii) that to a case like the present one, the doctrine of promissory estoppel had no application and (iii) that in any case, since there was no breach of any statutory duty a writ of mandamus could not have been issued. 2154):-there is abundant authority in favour of the proposition that a writ of mandamus can be granted only in a case..........laid down under executive instructions. on the basis of an application of the petitioner the state government in the political and services department allotted plot no. 313-a measuring 87' x 75' in kharabela nagar. unit no. iii, and a regular deed of lease was executed in his favour by the governor of orissa and was got duly registered on 30-12-1970. when the petitioner asked for possession thereof, there was dispute over the occupation of the land and the labour department of the state government did not permit the petitioner to take possession on the ground that in an earlier plan, the area had been reserved for the construction of a multipurpose labour welfare centre. after five years of correspondence and negotiation, the state government agreed to provide an alternate site in.....
Judgment:

R.N. Misra, J.

1. This is an application under Article 226 of the Constitution for a direction to the opposite parties to put the petitioner in possession of the land leased out to him under a registered deed of lease dated 14-1-1976,

2. Petitioner alleges that the State of Orissa opposite party No. 1 leases out homestead plots within the New Capital area of Bhubaneswar for residential purpose in terms of the guidelines Laid down under executive instructions. On the basis of an application of the petitioner the State Government in the Political and Services Department allotted plot No. 313-A measuring 87' x 75' in Kharabela Nagar. Unit No. III, and a regular deed of lease was executed in his favour by the Governor of Orissa and was got duly registered on 30-12-1970. When the petitioner asked for possession thereof, there was dispute over the occupation of the land and the Labour Department of the State Government did not permit the petitioner to take possession on the ground that in an earlier plan, the area had been reserved for the construction of a multipurpose labour welfare centre. After five years of correspondence and negotiation, the State Government agreed to provide an alternate site in Saheednagar to the petitioner by carying out two plots bearing Nos. B-61/A and B/61/B each measuring 40' x 80'. On 19th Dec. 1975, the Director of Estates-opposite party No. 2 informed the petitioner to the following effect:--

'Government have been pleased to allot the plot Nos. B-61/A and B-61/B in S.C.R. site measuring 40' x 60' each in the District Centre, Sahidnagar as per drawing No. 462 in your favour in exchange of plot No. 313-A measuring 87' x 75' in Unit No. 3 Kharbelanagar.'

Petitioner was directed to execute a deed of surrender in respect of the earlier plot and to clear up the ground rent of the said plot and produce up-to-date rent receipt. He was also informed that the amount of Rs. 1472/- towards the premium of the new plots had been adjusted out of the sum of Rs. 1500.75 deposited by the petitioner in respect of the earlier plot. In pursuance of the aforesaid direction, a fresh lease deed was duly registered on 14-1-1976, in the name of the Governor of Orissa in favour of the petitioner and the rights and obligations were indicated in the terms appended thereto. One of the relevant terms therein was to the following effect:--

'the lessor demise to the lessee for the purpose of construction of buildings and structures thereupon according to the plan and type approved by the lessor for the purpose of using the same only for commercial establishment with necessary living accommodation, to HOLD the said premises from the 29th day of Dec. 1975 for the term for 90 years paying therefore during the said term Rs. 22.04 paise as initial rent per annum.....'

In terms of the requirement, petitioner submitted a registered surrender deed in respect of the earlier plot on 9-2-1976, and furnished a duplicate copy of the lease deed dated 14-1-1976, with a view to enabling the Department to prepare the lay-out plan and deliver formal possession. Rent was realised in respect of the new leasehold from the petitioner. As no action was taken for delivering the same to the petitioner, he demanded the same by writing a letter dated 11-8-1977. Notwithstanding the demand, possession was not delivered. Petitioner, therefore, filed the writ application on 22-11-1977, for a direction to the opposite parties to put him in possession of the leasehold. He alleges that his right to hold property and enjoy the same guaranteed under Article 19 of the Constitution is being infringed by the action of the State.

3. The Director of Estates-opposite party No. 2 made e return to the rule nisi issued by the Court on behalf of both the two opposite parties, and admitted all the facts alleged by the petitioner. In para 7 of the counter affidavit it has been pleaded inter alia:--

'.....Side by side, the petitioner was also intimated to take delivery of possession of the plots, The Director, Town Planning, Orissa did not extend his consent to the carving out of the two above plots allotted to the petitioner on the ground that the aforesaid open space reserved in the front of the District Shopping Centre abutting Janapath will be affected and sizeable buildings and the proposed auditorium will be tracted behind. Carving out of two new plots will completely obstruct the proposed auditorium. In these circumstances, possession of the plots could not be delivered to the petitioner. Since the possession of the lands has not been delivered to the petitioner, it cannot be said that the petitioner has acquired valid and complete title over the lease-hold property.'

It has been further pleaded to para 8 of the counter affidavit:--

'..... assuming though not admitting that title passed to the petitioner on execution of the lease deed before delivery of possession, it is submitted that according to Sub-clause XI of Clause 2 of the lease deed, if the lessor at any time, before expiry of the lease, desired for any public purpose to resume the holding or any part thereof, the lessee shall vacate it or the part required, within 3 months of notice given by the lessor. In that event lessee will be entitled to reasonable compensation. It is not possible now to deliver possession of the plots to the petitioner as Government intends to resume the land for the public purpose, i.e. for the proposed auditorium etc. in that area, under Sub-clause XI of Clause 2.'

Petitioner filed a rejoinder reiterating his stand in the writ application.

4. At the hearing of the application, learned Government Advocate on behalf of opposite parties while conceding that there was no dispute over the facts in the matter has contended that the extraordinary jurisdiction of this court should not be permitted to be invoked In the instant case as, at the most, petitioner has alleged breach of contract and he should be asked to seek his relief by a regular suit. In support of this contention of his, reliance has been placed on a decision of the Delhi High Court in the case of N.L. Dalmia v. Union of India, AIR 1976 Delhi 154, and two recent decisions of the Supreme Court in the cases of Radkhakrishna Agarwal v. State of Bihar, AIR 1977 SC 1496, and Bihar E.G.F. Co-op. Socy. v. Sipahi Singh, AIR 1977 SC 2149.

The facts of the Delhi case are the following :--

Petitioner entered into an engagement for supply of ten thousand tents of a particular make for a price of Rs. 4,30,000/- by a stipulated date. The period of delivery was extended by the Union of India on certain conditions, but on August 18, 1969, the contract was cancelled on the allegation that the petitioner had failed to deliver the goods before Nov. 30, 1968, or the extended dates being Feb. 15, 1969, and May 31, 1969. The petitioner was told that the extra expenditure incurred in the risk purchase necessitated by the petitioner's failure to perform the contract would be intimated to him without prejudice to the rights of the Union of India as per the terms and conditions of the contract and in April, 1975, the Union of India informed the petitioner that they were entitled to recover a sum of Rs. 32,250/- by way of general damages. Upon petitioner's failure to pay the same, he was threatened with action as stipulated under the contract. Thereupon petitioner filed a writ application before the Delhi High Court that the demand of April 18, 1975, be quashed and the Government be directed to refund the money of the petitioner. The High Court ultimately concluded by saying (at pp. 161,162):--

'There is clear distinction between statutory obligation and a contractual obligation of the Government to pay money to a petitioner. Statute imposes a public duty while the duty imposed by a contract is owed by the Government not to the public but to the petitioner individually. A contravention of statute makes the action of a Government illegal. The breach of contract Is not Illegal in the same sense. Direct contravention of a statute is illegal but the breach of a contract may be wrongful. It is not contravention of any statute directly. A duty imposed by statute is different from a duty imposed by contract. Therefore, the breach of the first duty amounts to illegality while the breach of the second type of duty amounts to only a breach of contract,

We conclude, therefore as follows:

(1) The respondent are not under any public duty to pay to the petitioner the price of the goods purchased by them from the petitioner.

(2) The price of the goods is payable by the Government to the petitioner only under a contract.

(3) The non-payment of the price or withholding the payment thereof only amounts to a breach of contract.

(4) A writ petition would not be entertained to enforce the payment of money due from the Government to the petitioner because the non-payment of the money amounts at the most to a breach of contract.

(5) Absolutely no reason is given by the petitioner why the ordinary remedy of an arbitration or a civil suit should not be resorted to by him in recovering money due to him from the Government.'

The facts indicated in the judgment clearly show that petitioner was trying to enforce the contract and the Court was of the view that since the claim was on the basis of a contract and at the most what was alleged amounted to a breach of contract, a writ of mandamus should not be issued.

In Radhakrishna Agarwal's case (AIR 1977 SC 1496) (supra), the facts are the following: Petitioners were lessees from the State of Bihar and one of the terms of the lease stipulated was that the rate of royalty could be revised every three years in consultation with the lessees and the decision of the State Government was to be binding on the lessees, Purporting to exercise the power of revision of the royalty, Government enhanced the same and when the lessees refused to accept the liability. Government directed cancellation of the lease. Thereupon the Patna High Court was moved for vacating the enhancement of the royalty and the consequent cancellation of the lease. Before the Supreme Court reliance was placed on Article 14 of the Constitution. Repelling the contention, Learned Chief Justice spoke for the Court thus (at p. 1500) :--

'In the cases before us the contracts do not contain any statutory terms or obligations and no statutory power or obligation which could attract the application of Article 14 of the Constitution is involved here. Even in cases where the question is of choice or consideration of competing claims before an entry into the field of contract facts have to be investigated and found before the question of a violation of Article 14 could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. Such proceedings are summary proceedings reserved for extraordinary cases where the exceptional and what are described as, perhaps not quite accurately 'prerogative' powers of the Court are invoked. We are certain that the cases before us are not such in which powers under Article 226 of the Constitution could be invoked.'

The Co-operative Society's case (AIR 1977 SC 2149) (supra) also came from the Patna High Court in appeal. The facts of the case appear from para 2 of the judgment are these: The Co-operative Society took settlement of certain fishery in 1950. The particular fishery was settled with it for the year 1974-75 beginning from 1-7-1974 on a premium of Rs. 1,50,000/-. At the end of the year it was discovered that the Society had defaulted in paying to the tune of Rs. 66,869/-. Thereupon the fishery was settled for one year with effect from July 1, 1975, with the respondent by way of public auction by the Revenue Department for the highest bid of Rs. 1,65,000/-. In Feb. 1976, the auction purchaser made a representation to the Revenue Department for remission of Rs. 75,000/- on the ground that he had suffered a heavy loss as a result of unlawful activities of the members of the Society. In the alternative, he prayed that the lease may continue with him for three years at the same amount so that he could recoup his losses and pay the legitimate dues of the State. Government directed that for two subsequent years on the same annual consideration as in the first year the respondent may continue to enjoy the fishery but called upon the respondent to deposit the amount of rupees 1,65,000/- as a condition precedent. The respondent deposited the amount on May 3, 1976, and asked for issue of the patta of settlement. In the meantime, the State Government had changed its mind on the representation of the Co-operative Society and by order dated 29-6-1976, Government decision was communicated to the effect that the fishery should be settled with the Society on condition that the Society should make good the deficiency of the earlier year and undertake to pay the sum of Rs. 1,65,000/- which was the highest bid amount. When the respondent wanted to be put in possession, he was appraised of the subsequent Government decision. Thereupon he moved the High Court at Patna under Article 226 of the Constitution for cancellation of the Government decision and for being put in possession of the fishery for exploitation. The High Court held that there was no binding or enforceable contract between the State Government and the respondent. Yet, relying on the principle of promissory estoppel, it allowed the application. Before the Supreme Court, three contentions were advanced, namely, (i) that since there was no completed, binding and enforceable contract between the State of Bihar and respondent No. I as contemplated by Article 299 of the Constitution the writ petition filed by respondent No. 1 was not maintainable (ii) that to a case like the present one, the doctrine of promissory estoppel had no application and (iii) that in any case, since there was no breach of any statutory duty a writ of mandamus could not have been issued. The decision on the third contention is relevant for the present case. The learned Judges in dealing with that contention observed (at p. 2154):--

'..... There is abundant authority in favour of the proposition that a writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. The chief function of a writ is to compel performance of public duties prescribed by statute and to keep subordinate tribunals and officers exercing public functions within the limit of their jurisdiction. It follows, therefore, that in order that mandamus may issue to compel the authorities to do something, it must be shown that there is a statute which imposes legal duty and the aggrieved party has a legal right under the statute to enforce its performance. ....

In the instant case, it has not been shown by respondent No. 1 that there is any statute or rule having the force of law which casts a duty on respondents 2 to 4 which they failed to perform. All that is sought to be enforced is an obligation flowing from a contract which, as already indicated, is also not binding and enforceable. Accordingly, we are clearly of the opinion that respondent No. 1 was not entitled to apply for grant of writ of mandamus under Article 226 of the Constitution and the High Court was not competent to issue the same.'

In Radhakrishna Agarwal's case (supra) the title of the petitioner to the leasehold was in dispute, inasmuch as the lease had already been cancelled and the case before the Court was one where question of pure alleged breaches of contract were involved. The Constitution Bench in the case of State of Orissa v. Ram Chandra Dev, AIR 1964 SC 685, pointed out in para 8 of the judgment;--

'.....Under Article 226 of the Constitution, the jurisdiction of the High Court is undoubtedly very wide. Appropriate writs can be issued by the High Court under the said article even for purposes other than the enforcement of the fundamental rights and in that sense, a party who invokes the special jurisdiction of the High Court under Article 226 is not confined to cases of illegal invasion of his fundamental rights alone. But though the jurisdiction of the High Court under Article 226 is wide in that sense, the concluding words of the article clearly indicate that before a writ or an appropriate order can be issued in favour of a party, it must be established that the party has a right and the said right is illegally invaded or threatened. The existence of a right is thus the foundation of a petition under Article 226.....'

In Radhakrishna Agarwal's case (supra) his right to the property under the lease was under challenge and the en-tire claim was found to be confined to the contract which had been rescinded. In that background, the Court dealt with the matter.

5. In the Co-operative Society's case (supra) the right was also under challenge and there was thus no property with conceded title in flavour of respondent No. 1 to be protected. From para 4 of the judgment it is clear that the High Court had found and the Supreme Court in appeal did not disturb the finding that there was no binding and enforceable contract between the parties. The Court came to hold that the doctrine of promissory estoppel was not applicable. The Court further found that the respondent No. 1 was not pressing for enforcement of any statutory duty or legal obligation.

6. The facts of the present case are, however, very different. The fact that there is a valid lease deed in favour of the petitioner has not been questioned. Though It has been contended in the counter affidavit that since possession has not been delivered, title does not accrue, it is not necessary to cite authorities for the proposition that upon registration of the lease deed title to the leasehold vests in the lessee. Under the provisions of Section 108 of the T. P. Act, the lessee has a statutory right to force the lessor to put him in possession of the leasehold property, in fact Section 108, Clause (b) of the Act, casts that obligation on the lessor. Petitioner has claimed for enforcement of that statutory obligation.

7. Admittedly when there is a valid lease in favour of the petitioner, right to property has been created in his favour and he is entitled to have possession and enjoy the leasehold in accordance with law. Since the lessor has omitted to perform its part of the obligation, petitioner as the lessee of the property has a statutory right to enforce performance of the obligation.

Even while keeping the provisions of the Transfer of Property Act in view, at one stage we were inclined to accept the objection advanced by the State Government, inasmuch as the obligation stipulated therein was within reference to a lessor and not the State as such; but the facts have a tell-tale aspect. Petitioner in his anxiety to obtain lease of some lands within the New Capital approached the State Government as early as 1970 and obtained a valid lease in his favour by payment of the consideration money. Possession of the property was not granted to him on account of an objection raised by another Department of the State Government. Though possession was not made over to the petitioner, he was made to pay the rent for the property up to surrendering the same in 1976. Ungrudgingly petitioner bore the burden as he was anxious for an alternate site by way of lease. For good consideration, an alternate site was offered and petitioner performed his part of obligation and on the representation of the State that he was going to enjoy the property for 90 years petitioner surrendered his right under the earlier lease, specific performance of which he could have asked for. Government had not been able to perform its obligation under the first lease on account of objection by another Department of its own. When an alternate site was offered, it is assumed that appropriate enquiry was made and Government was satisfied that the same difficulty which had been experienced earlier was not going to be again experienced In regard to the new site. It must be assumed that appropriate satisfaction had been reached before the fresh offer was made and ultimately the offer, when accepted by the petitioner led to a formal lease deed. Government must be aware of its obligation under law and when it makes representation to a citizen and enters into obligation in the shape of a formal contract, Government must be aware of the position that its act creates rights in favour of the citizen and the said citizen is entitled to work out his rights, It was only on the basis of the representation of the State Government that the petitioner surrendered the legal right created in his favour under the first lease deed and thus changed his position to his prejudice relying on the representation. In the facts and circumstances appearing in the case, the principles indicated in the case of Union of India v. Anglo Afgan Agencies, AIR 1968 SC 718, are fully attracted and petitioner is entitled to succeed on the basis of promissory estoppel.

We cannot but point out that the State Government is bound to act in a manner which would hold out ideal conduct for citizens to imbibe and it cannot undertake performance of its functions in a manner which would lead to litigations and drive law-abiding citizens to raise disputes for enforcing their admitted rights. By its conduct and performance, the State must create a sense of security in the minds of the citizens and citizens while dealing with the State must be in a position to rely upon the representations made by it. Government is an indispensable institution for every civilised Society. On account of the fact that Government is the repository of the mighty powers of the State and notwithstanding the change that the democratic set up brings about in the manning thereof, there is continuity of administration; there is a declared policy and impersonal approach to matters, over the ages and throughout the world, Governmental dealings have been treated as a class by themselves. A special sanctity attaches to its acts; a presumption of correctness is available in respect of them and a sense of security is assumed in relation thereto. No group of men in charge of the administration at a given time is entitled to affect its credibility or tarnish its image. In the long run, Society is bound to reap the evil consequences of the fallen path. These are the special circumstances which lead us to hold that petitioner has all the equities in his favour.

8. In the counter affidavit, it has been pointed out that if the property is given to the petitioner and he is allowed to raise construction the proposed auditorium would be adversely affected. It has simultaneously been pointed out that under the contract it is open to State to resume the property on payment of compensation. It is unfortunate that such a stand has been taken without disclosing any further material to support the genuineness of the plea. It is also not known as to when the site for the auditorium was determined. Since title has already vested in the petitioner in respect of the two plots offered by way of the alternative, petitioner must be given possession of the property and thereafter it is open to the State in accordance with law and contract to resume the same. No notice of resumption has been given nor has compensation been offered. In the circumstances, the plea raised in paragraph 8 of the counter affidavit seems to be only a defence for the purpose of litigation without any genuine basis for it, Government in the Political and Services Department while dealing with the question of leasing out public property to individual citizens must behave with greater care and attention so that the image of the State may not be tarnished and its transactions may not end up in litigations. Credibility of the State is of paramount consideration and no citizen should be given occasion to develop feeling of antagonism against the State.

9. Having heard learned counsel for both sides and for the reasons Indicated above, we are inclined to hold that the objection raised on behalf of the State is not tenable on the facts of the case and the writ application has to be allowed. We accordingly direct that a writ of mandamus shall issue to the two opposite parties to put the petitioner in possession of the leasehold within one month from the date of service of the writ. Petitioner shall have his cost of the application. Hearing fee is assessed at Rs. 200/- (two hundred).

P.K. Mohanti, J.

10. I agree.


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