Sugati Beach Resort Pvt. Ltd vs Union Of India And Ors
2017 Latest Caselaw 10024 Bom

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                           CIVIL APPELLATE JURISDICTION

                           Writ Petition NO. 11766 OF 2017

Sugati Beach Resort Pvt. Ltd.                                     ...Petitioner
      Versus
Union Of India And Ors.                                           ...Respondents

                                          with
                          Civil Application No.2798 of 2017


Mr.P.K.Dhakephalkar, Senior Advocate  with Mr.S.R.Ganbavale with Mr.Mehul  
Shah, for the Petitioner.

Mr.S.S.Deshmukh, for the Respondents.
                                    ---
                        CORAM        :            SHANTANU KEMKAR &
                                                  G. S. KULKARNI, JJ.

                        RESERVED ON        :      30 NOVEMBER 2017

                PRONOUNCED ON              :      22 DECEMBER 2017

JUDGMENT : (Per G.S.Kulkarni, J.)

1. Heard the learned Counsel for the parties. The petitioner has

participated in a tender issued by the Union Territory Administration of

Daman and Diu/respondents dated 7 May 1997. The tender was for lease

of the government property/land for a period of twenty years namely

"Tourist Resort (Flamingo Resort) Ghoghla, Diu." The petitioner being a

successful bidder, a lease agreement was entered between the President of

India through respondent no.4 and the petitioner on 10 October 1997.

There was an addendum to this agreement entered in 2009 acknowledging

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the petitioner being party to the original lease deed dated 10 October

1997.

2. The case of the petitioner is that in pursuance of the lease, it

has undertaken additions and alterations in the leased premises as also had

undertaken repairs of the dilapidated structures and had reconstructed

them. It is contended that the petitioner had also approached the

authorities seeking permission for construction of swimming pool in the

existing pond in the leased premises. The petitioner has referred to

approvals of the respondents for construction of rooms in the resort. The

petitioner thus contends that having undertaken the renovation and

construction activities, there is a legitimate expectation that the lease

period be extended beyond twenty years as granted under the lease dated

10 October 1997. However, the respondents by order dated 13 October

2017 informed the petitioner that the lease period of twenty years has

expired on 9 October 2017 and that the Union Territory Administration of

Daman & Diu as per its policy has decided that the said lease shall not be

extended and the said property shall be put to open bidding process

through re-tender for entering into a fresh lease. The petitioners are also

informed that extension for a period of three months or till new lessee is

selected through a bidding process, whichever is earlier at existing terms

and conditions may be considered, subject to petitioner's written consent

for the same and subject to written undertaking that the petitioner will

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vacate the property immediately on expiry of three months or upon

selection of a new lessee. Accordingly, the petitioner was called upon to

hand over vacant possession of the said premises to the Collector, Diu or to

submit its consent for extension of lease of three months. This order was

forwarded by the Deputy Director (Tourism), Diu to the petitioner vide

communication dated 18 October 2017.

3. The petitioner being aggrieved by the above communication

and order, has filed the present petition. The contention as urged on behalf

of the petitioner is that the petitioner has spent substantial amounts during

the lease period in undertaking development and constructing rooms etc.

on the lease property and having invested valuable amounts, it is a

legitimate expectation of the petitioner that the lease ought to be extended.

It is further submitted that the condition of extension as being imposed for

a period of three months based on the undertaking, is also an arm twisting

mechanism. The petitioner submits that the impugned action on the part

of the respondent is illegal and seeks the following reliefs:-

"A Rule be issued, record and proceedings be called for;

B. This Hon'ble Court, by a writ of mandamus or a writ in the nature of mandamus and/or any other appropriate writ, order and direction, be pleased to quash and set-aside the order issued by the Respondent No.2, vide its communication no.DT/-ADM- 2001/2017-18/1048, dated 13-10-2017, and, order issued by the Respondent No.3, vide its communication no.No.-4-56/DT/-ADM- Part 1/2001/2017-18/187, dated 18-10-2017.

                C.      Pending   the   hearing   and   final   disposal   of   the   present 





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petition the impugned order issued by the Respondent No.2, vide

its communication no.DT/-ADM-2001/2017-18/1048, DATED 13-

10-2017, and, order issued by the Respondent No.3, vide its

communication no. No.-4-56/DT/-ADM-Part 1/2001/2017-

18/187, dated 18-10-2017, be stayed/suspended.

D. Pending the hearing and final decision of the present writ

decision, this Hon'ble Court be pleased to forbear the

Respondents, from taking possession and/or sealing the premises

of the Sugati Beach Resort Pvt.Ltd., situated at Ghoghlla, Diu.

E. Pending the hearing and final disposal of the present writ petition, this Hon'ble Court be pleased to fix the market rent of the lease property .e. Sugati Beach Resort Pvt.Ltd., situated at Ghoghla, Diu, in terms of Clause 2, of the Lease Agreement, to be paid by the Petitioner, from October,2017, for the additional period of 10 years."

4. After filing of the petition, the petitioner has also moved a civil

application seeking amendment in the petition interalia contending that

the Government policy which is referred in the decision dated 13 October

2017 not to extend the lease and to invite fresh bids, was never informed

to the petitioner. It is contended that the policy is illegal and violative of

the mandate of Section 229 and 230 of the Constitution. It is the case of

the petitioner that the said policy would not be in public benefit and it

would be a legal right of the petitioner to avail in its favour an extension of

the lease period.

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5. We have heard the learned Counsel for the parties. We have

also perused the documents as placed on record. It is not in dispute that

the petitioner is a beneficiary of lease deed dated 10 October 1997 which

was in respect of the tourist complex which was granted to the petitioner

under a tender dated 7 May 1997 which was described as under:

".....leasing out the entire tourist complex (Flamingo Resort) Ghoghla, Diu, i.e. tourist cottages and Bar-cum-Restaurant and Conference Hall, described in the Schedule annexed to these presents at Ghoghala-Diu. ...."

It is not in dispute that the lease was for a period of twenty years and the

same expired in May,2017. The clauses relevant in the context of the

present dispute are clauses 2, 11, 16, 25 and 28 which read thus:

"2. The lease initially shall be for a period of 20 years which may be renewed for a further period of 10 years at the option of the Lessor at the market rates prevailing at the end of the said period of 20 years and other things being equal, the lessee shall have first preference for allotment of Tourist Complex. ... ... ...

11 The lessee shall not make any structural or other additions or alterations in the tourist complex or affix or attach thereto any fitting or fixtures or fastening whatsoever without the written permission of the Collector, Diu.

... ... ..

16. The leasee shall provide the furniture and the other equipment of good quality for the cottages and shall also provide all vessels, utensils, cutlery, crockery and all other equipment necessary for running the complex and maintain the same in good hygienic condition to the satisfaction of the Tourism Department, Diu. Similarly, good quality of table linen, bed sheets etc. shall also be provided for by the leasee.

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                ... ... ... 

25. The leasee shall construct at its own cost a swimming pool at appropriate place alongwith its maintenance within the complex with the approval of Collector, Diu and within the first three years of lease period. After the expiry of the lease period the assets will be the property of u.t. Administration of Daman and Diu.

... ... ...

28. The Collector, Diu, reserves the right to amend, revoke or modify the lease at his discretion as well as to withdraw all or any of the Terms and Conditions at any stage without assigning any reason whatsoever." (emphasis supplied)

6. Perusal of the above clauses clearly indicate that the rights as

conferred under the lease agreement on the petitioner to use and utilize

the lease property were restricted. It is not in dispute that the lease period

was initially for twenty years and there is no mandate under the

agreement, for the respondent to renew the same in favour of the

petitioner. In any case clause 2 which uses the word "may be renewed" is

however would be subject to the conditions as contained in clause 28. The

parties have agreed to qualify clause (2) by clause (28) by which the

Collector, Diu reserves the right to amend, revoke or modify the lease at his

discretion and also withdraw all or any of the conditions at any stage

without assigning any reason whatsoever.

7. On the above clear terms as contained in the lease agreement

entered between the parties, we do not find that the approach of the

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respondent-Union Territory Administration is in any manner arbitrary or

contrary to law in issuing the order dated 13 October 2017 in deciding not

to grant further extension of lease to the petitioner but to initiate bidding

process through re-tender for entering into a fresh lease. In any event the

action to re-auction the said government property for a fresh lease to be

entered into is being done after completion of twenty years of lease and it

is not something premature before the lease period could expire. The

petitioner had adequate notice in view of the terms and conditions of the

lease deed that at the end of the lease period of twenty years, a

consequence of this nature is the fall out of the agreed terms and

conditions of the lease deed. It also cannot be accepted that the petitioner

being in this business is not aware of the policy of the Union Territory

Administration.

8. We are also not impressed on the submission as urged on

behalf of the petitioner that there is legitimate expectation of the petitioner

for extension of lease in favour of the petitioner. This for the reason that if

it was to be so then, clause (2) and clause (28) of the lease deed would not

have been framed in the manner they appear in the lease deed, or clause

28 of the lease deed would not have formed part of the lease deed. We

also cannot accept the contention of the petitioner only because certain

construction is made and amounts are spent, there would be legitimate

expectation of continuation of lease period. Whatever expenditure was

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incurred or investment made during past twenty years during the

subsistence of the lease, was for commercial exploitation of leased property

and the petitioner has already reaped financial benefits by commercial use

of the lease land in a tourist place like Diu. We, therefore, outrightly reject

the submissions of the petitioner on legitimate expectation.

9. We are of the clear opinion that there is nothing arbitrary in

the order dated 13 October 2017 passed by the respondents calling upon

the petitioner to vacate the suit premises and to grant an opportunity to the

petitioner to enter into an ad-hoc agreement of three months to continue in

the premises till the tender process is completed. It appears to be the policy

of the respondents to avail of a maximum benefit from the Government

property and gain more revenue by initiating a new tender process. There

would be nothing wrong in such a policy if the Union Territory

Administration in public interest desires to enhance its revenue in such a

manner. It therefore cannot be said that such a policy would breach any of

the legal rights much less fundamental rights of the petitioner. There

cannot be any fundamental right guaranteed to the petitioner to compel

the respondent-Union Territory Administration to enter into a lease only

with the petitioner. It is not the case that the petitioner is precluded from

participating in fresh tender which may be floated by the Union Territory

Administration and compete with the other market players. However, the

intention of the petitioner is to avoid such fresh participation in the fresh

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bids to be invited by the Union Territory Administration and in some

manner hang on to the property raising such untenable contentions as

noted by us above.

10. Apart from the above observations, we are also surprised at the

approach of the petitioner to invoke the jurisdiction of this Court under

Article 226 of the Constitution when the dispute that the petitioner is

raising is purely under a lease deed, a contract between the parties, and the

contentions as raised are in the nature of a challenge to the terms and

conditions of the contract on a spacious plea that the lease deed created an

absolute right in the petitioner for extension of the lease, however, which

we see none.

11. In our considered opinion, the petitioner thus cannot seek an

absolute legal right to seek extension of lease and for such a relief seek a

writ of mandamus that the respondents be directed to enter into a further

lease agreement with the petitioner. If such contention as urged on behalf

of the petitioner is accepted, the very sanctity of the lease agreement dated

10 October 1997 and the terms and conditions contained therein between

the parties is lost. In any case such prayer of the petitioner before this

Court in Writ Petition under Article 226 of the Constitution is certainly not

maintainable.

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12. In the circumstances, we find no merit in the petition. The

petition is accordingly rejected No costs.

13. In view of disposal of the writ petition, pending civil

application does not survive. It is accordingly disposed of.

14. At this stage, Mr.Dhakephalkar, learned Senior Counsel for the

petitioner seeks extension of the ad-interim relief. In the facts and

circumstances of the case, the prayer is rejected.

         (G.S. KULKARNI, J.)                           (SHANTANU KEMKAR, J.)