Bombay High Court
M/S S B Developer And Sons Thr Kirti ... vs The Charity Commissioner And Ors on 4 May, 2021
Bench: K.K. Tated, N. R. Borkar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE SIDE JURISDICTION
WRIT PETITION (ST.) NO.9560/2021
M/s.S.B.Developer and Sons ..... Petitioner
Vs.
The Charity Commissioner and Ors. ..... Respondents
Mr.Sanjiv Sawant i/b Mr.Abhishek S. Matkar for the
Petitioner
Mr.A.P.Vanarase, A.G.P. for the State
CORAM: K.K.TATED &
N.R.BORKAR, JJ.
DATED : MAY 04, 2021
(VIDEO CONFERENCING)
P.C.
. Heard.
2. By this Petition, under Article 226 of the Constitution
of India, Petitioner is seeking direction against the
Respondents to pay the principal outstanding amount of
rent to the Petitioner for the period commencing from
15.05.2017 and ending on 21.05.2018 pursuant to the
registered Leave and License Agreement dated 22.11.2018
in respect of Petitioner's premises being Flat No.201 to 206,
2nd foor, Siddhivinayak Residency, Plot No.6, Building No.6,
Palghar (E) - 401404 (hereinafter referred as "said
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premises) totalling amount of Rs.10,77,007/- (Rupees Ten
Lakhs Seventy Seven Thousand and Seven Only) plus G.S.T.
as applicable.
3. The learned counsel for the Petitioner submits that
Respondents entered into the Leave and License
Agreement dated 22.11.2018 in respect of the said
premises. He submits that it is specifcally stated in the said
Leave and License agreement that licencee has been
allowed to occupy the premises as per the letter cum order
given by Government of Maharashtra dated 13.11.2018. He
relies on following clauses of the Leave and License
Agreement which reads thus:
"AND WHEREAS, THE Licensee has been allowed
to occupy the premises as per order given by
Government of Maharashtra dated 13/11/2018
1)This Agreement is effective from 15/05/2017
2) This Leave and License Agreement is for a
period of Three year i.e. from 15/05/2017 to
14/05/2020.
4(xiv) The Term of Leave and License shall be for
three years from the date of licence, which shall
expire on the 14/05/2020. If the
Licensee/Licensor (any one) desires to vacate the
premises before the expiry of lease, they shall
intimate the Licensee/Licensor 90 days advance in
writing.
4(xvi) The licensor shall not in any manner deal
with or dispose of the premises or any part thereof
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or their interest therein during the continuance of
the license term to or in favour any person except
after informing such transferee of this License
Agreement so that the rights of the licensee
hereunder are not prejudice, jeopardized or
adversely effected. In the event the licensor deals
with or disposes or sales or transfer the premises
or any part thereof or any interest therein during
the continuance of the license agreement to or in
favour of any person or entity, the licensor shall
cause the transferee to execute the License
Agreement with the licensee on the same terms
and conditions as set forth herein."
4. The learned Counsel for the Petitioner submits that in
the present proceeding, Law & Judiciary Department, State
of Maharashtra, specifcally informed the Respondent offce
of the Charity Commissioner by their letter dated
13.11.2018 that the agreement is to be executed for the
period 15.05.2017 to 14.05.2020.
5. The learned counsel for the Petitioner submits that
the Respondent offce of the Charity Commissioner failed
and neglected to pay the rent for the period 15.05.2017 to
21.11.2018 only on the ground that actually they took
possession of the premises on 22.11.2018. He submits that
as the Respondent failed and neglected to pay license fees
as per registered Leave and License agreement dated
22.11.2018, they fled the present Writ Petition. He submits
that as on today also, Respondents are occupying said
premises. Hence, in the interest of justice, this Hon'ble
Court be pleased to direct the Respondents to clear the
arrears of rental charges as claimed by the Petitioner.
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6. On the other hand, the learned A.G.P. for the
Respondents fled their Affdavit-in-Reply dated 04.05.2021
duly affrmed by Assistant Charity Commissioner and also
place on record compilation of correspondence by their
letter dated 29.04.2021.
7. The learned A.G.P. for the Respondent submits that
there is no question of paying license fees to the Petitioner
for the period commencing from 15.05.2017 to 21.11.2018.
He submits that they are liable to pay the rent only for the
period when possession was taken by them. He submits
that from the date of possession they are paying license fees
to the Petitioner regularly. In support of this contention,
the learned A.G.P. for the Respondent relied on paragraph 4
to 8 of their Affdavit-in-Reply. He submits that it is
specifcally stated in the Leave and License agreement
dated 22.11.2018 that licensee has been allowed to occupy
the premises as per the order given by the Government of
Maharashtra dated 13.11.2018 He submits that in the
present proceeding, they have received information from
the Government of Maharashtra by their letter dated
13.11.2018. Therefore, there is no question of payment of
any rental compensation from the date of execution of
Leave and License Agreement. He further submits that
even otherwise, alternate effcacious remedy is available to
the Petitioner to raise his objection about recovery of
arrears of rent.
8. After arguing for some time, the learned A.G.P. for the
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Respondent submits that actually they fled their Affdavit-
in-Reply dated 04.05.2021 only on short point. He submits
that it remained on their part to fle the detailed parawise
reply. Hence, he requires some time.
9. It is to be noted that in the present proceedings,
admittedly, the Respondents executed the registered Leave
and License Agreement dated 22.11.2018 where it is
specifcally stated that agreement will be effective from
15.5.2017 for three years i.e. from 15.05.2017 to
14.05.2020. Not only that, in Clause 4 (xiv) it is specifcally
stated that Leave & licence agreement shall expire on
14.05.2020. This itself shows that same was executed for
three years from 15.05.2017 to 14.05.2020. Therefore,
there is no question of denying any compensation/rental
amount for the period 15.05.2017 to 21.11.2018 only on the
ground that Respondents have not taken possession of the
suit premises.
10. It is to be noted that the objection raised by the
Respondent about alternate effcacious remedy is also not
maintainable in the present proceeding. The Apex Court in
the matter of Unitech Limited & Ors. vs. Telangana State
Industrial Infrastructure Corporation (TSIIC) & Ors, 2021
(2) Scale 653 stated that Writ Petition is maintainable in a
contractual matter also. Paragraph 32 and 33 of the said
judgment reads thus:
"32. Much of the ground which was sought to be
canvassed in the course of the pleadings is now
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subsumed in the submissions which have been
urged before this Court on behalf of the State of
Telangana and TSIIC. As we have noted earlier,
during the course of the hearing, learned Senior
Counsel appearing on behalf of the State of
Telangana and TSIIC informed the Court that the
entitlement of Unitech to seek a refund is not
questioned nor is the availability of the land for
carrying out the project being placed in issue.
Learned Senior Counsel also did not agitate the
ground that a remedy for the recovery of moneys
arising out a contractual matter cannot be availed
of under Article 226 of the Constitution. However,
to clear the ground, it is necessary to postulate
that recourse to the jurisdiction under Article 226
of the Constitution is not excluded altogether in a
contractual matter. A public law remedy is
available for enforcing legal rights subject to well-
settled parameters.\
33. A two judge Bench of this Court in ABL
International Ltd. v. Export Credit Guarantee
Corporation of India [ABL International] analyzed
a long line of precedent of this Court to conclude
that writs under Article 226 are maintainable for
asserting contractual rights against the state, or
its instrumentalities, as defned under Article 12
of the Indian Constitution. Speaking through
Justice N Santosh Hegde, the Court held:
"27. ...the following legal principles emerge as
to the maintainability of a writ petition:
(a) In an appropriate case, a writ petition as
against a State or an instrumentality of a
State arising out of a contractual obligation is
maintainable.
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(b) Merely because some disputed questions
of fact arise for consideration, same cannot be
a ground to refuse to entertain a writ petition
in all cases as a matter of rule.
(c) A writ petition involving a consequential
relief of monetary claim is also maintainable."
This exposition has been followed by this Court,
and has been adopted by three- judge Bench
decisions of this Court in State of UP v. Sudhir
Kumar and Popatrao Vynkatrao Patil v. State of
Maharashtra. The decision in ABL International,
cautions that the plenary power under Article
226 must be used with circumspection when other
remedies have been provided by the contract. But
as a statement of principle, the jurisdiction under
Article 226 is not excluded in contractual matters.
Article 23.1 of the Development Agreement in the
present case mandates the parties to resolve their
disputes through an arbitration. However, the
presence of an arbitration clause within a contract
between a state instrumentality and a private
party has not acted as an absolute bar to availing
remedies under Article 226. If the state
instrumentality violates its constitutional
mandate under Article 14 to act fairly and
reasonably, relief under the plenary powers of the
Article 226 of the Constitution would lie. This
principle was recognized in ABL International:
"28. However, while entertaining an objection
as to the maintainability of a writ petition
under Article 226 of the Constitution of India,
the court should bear in mind the fact that the
power to issue prerogative writs under Article
226 of the Constitution is plenary in nature
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and is not limited by any other provisions of
the Constitution. The High Court having
regard to the facts of the case, has a discretion
to entertain or not to entertain a writ petition.
The Court has imposed upon itself certain
restrictions in the exercise of this power.
(See Whirlpool Corpn. v. Registrar of Trade
Marks[(1998) 8 SCC 1] .) And this plenary
right of the High Court to issue a prerogative
writ will not normally be exercised by the
Court to the exclusion of other available
remedies unless such action of the State or its
instrumentality is arbitrary and unreasonable
so as to violate the constitutional mandate of
Article 14 or for other valid and legitimate
reasons, for which the Court thinks it
necessary to exercise the said jurisdiction."
(emphasis supplied).
Therefore, while exercising its jurisdiction under
Article 226, the Court is entitled to enquire into
whether the action of the State or its
instrumentalities is arbitrary or unfair and in
consequence, in violation of Article 14.The
jurisdiction under Article 226 is a valuable
constitutional safeguard against an arbitrary
exercise of state power or a misuse of authority. In
determining as to whether the jurisdiction should
be exercised in a contractual dispute, the Court
must, undoubtedly eschew, disputed questions of
fact which would depend upon an evidentiary
determination requiring a trial. But equally, it is
well-settled that the jurisdiction under Article 226
cannot be ousted only on the basis that the dispute
pertains to the contractual arena. This is for the
simple reason that the State and its
instrumentalities are not exempt from the duty to
act fairly merely because in their business dealings
they have entered into the realm of contract.
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Similarly, the presence of an arbitration clause
does oust the jurisdiction under Article 226 in all
cases though, it still needs to be decided from case
to case as to whether recourse to a public law
remedy can justifably be invoked. The jurisdiction
under Article 226 was rightly invoked by the
Single Judge and the Division Bench of the Andhra
Pradesh in this case, when the foundational
representation of the contract has failed. TSIIC, a
state instrumentality, has not just reneged on its
contractual obligation, but hoarded the refund of
the principal and interest on the consideration
that was paid by Unitech over a decade ago. It does
not dispute the entitlement of Unitech to the
refund of its principal."
11. In the present proceedings, admittedly, Respondents
executed registered Leave and license agreement dated
22.11.2018 for the period 15.05.2017 to 14.05.2020.
Therefore, prima facie, we are of the opinion that they are
liable to pay compensation for this period but in any case,
the learned A.G.P. for the Respondents submits that they
fled short affdavit in the present matter and they require
some time to fle detailed affdavit giving the parawise reply
to the petition. In view of these facts, following order is
passed:
a. Liberty granted to the Respondents to fle detailed
Affdavit-in-Reply with copy to the Petitioners on or before
09.06.2021.
b. Liberty granted to the Petitioners to fle rejoinder if
any, on or before 15.06.2021 with copy to other side.
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c. Respondents are directed to deposit sum of
Rs.10,77,007/- in the Registry of this court on or before
08.06.2021 failing which they have to pay interest @ 12%
from the due date to the Petitioner if he succeeds in the
present matter.
d. If amount is deposited within time, Registry is
directed to invest the said amount in fxed deposit of any
nationalised bank initially for a period of 181 days and that
be continued till further orders.
e. Matter to appear on board on 21.06.2021.
(N.R.BORKAR, J.) (K.K.TATED, J.)
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