Bombay High Court
Pancham Acquaculture Farms Ltd. ... vs The State Of Maharashtra Through Its ... on 4 October, 2024
Author: A.S. Chandurkar
Bench: A.S. Chandurkar
2024:BHC-AS:39503-DB
WP-5787-24.doc
BDP-SPS-
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BHARAT
DASHARATH
PANDIT CIVIL APPELLATE JURISDICTION
Digitally signed by
BHARAT
DASHARATH
PANDIT
Date: 2024.10.07
20:05:33 +0530
WRIT PETITION NO. 5787 OF 2024
1] Pancham Acquaculture Farms Ltd. ]
A Joint Sector Company, ]
Through its Director namely, ]
Shri Ajitsinh B. Patil, ]
Age Adult. Occ: Business, having registered ]
office at 03-B, Mittal Tower, Nariman Point, ]
Mumbai. ]
]
2] Shri Arun Raghunath Patil ]
Age: Adult, Occu: Business, R/o. A-4-2-1, ]
New Palm Beach Co-operative Housing ]
Society Ltd., Sector 4, Nerul, ]
Navi-Mumbai 400 706 ] ..... Petitioners.
V/s.
1] The State of Maharashtra ]
Through its Additional Chief Secretary, ]
Revenue and Forest Department, ]
Mantralaya, Mumbai ]
]
2] Urja Foods & Agro Pvt. Ltd., ]
having its registered office at ]
Nakshatra Residence, Chitra C-2, ]
(101-104), Pune-Nashik Highway, ]
A/p- Manchar, Tq. Ambegaon, ]
Dist. Pune. ]
]
3] The Collector, Palghar ] ..... Respondents.
-----
Mr. A. A. Kumbhakoni, Senior Advocate with Mr. Manoj Badgujar and
Mr. Akshay P. Shinde, Advocates for the petitioners.
Dr. Birendra B. Saraf, Advocate General with Mr. P.P. Kakade,
Government Pleader and Mr. S.P. Kamble, Assistant Government
Pleader for the respondent nos. 1 and 3.
1/19
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Mr. A.V. Anturkar, Senior Advocate with Mr. Tanaji Mhatugade for the
respondent no.2.
------
CORAM : A.S. CHANDURKAR & RAJESH S. PATIL, JJ
The date on which the arguments were heard : 25TH SEPTEMBER, 2024.
The date on which the Judgment is pronounced : 4 th OCTOBER, 2024.
JUDGMENT :
[ Per A.S. Chandurkar, J. ]
1] Rule. Rule made returnable forthwith and heard learned
counsel for the parties.
The petitioner no.1, a Joint Sector Company through its Director
along with petitioner no.2 has filed this writ petition under Article 226
of the Constitution of India raising a challenge to the Government
Resolution dated 13/03/2024 issued by the Revenue and Forest
Department of the State Government by virtue of which an area
admeasuring 343 Hectares 23.40 Ares has been allotted to the 2 nd
respondent Urja Foods & Agro Private Limited (for short, "UFAPL") for
a duration of thirty years on lease. This allotment is for enabling
UFAPL to undertake acquaculture activities. Besides aforesaid
challenge, the petitioners also pray that a direction to be issued to the
Revenue and Forest Department to extend the lease period of the area
that was initially allotted to the petitioner no.1, Pancham
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Acquaculture Farms Limited (for short, "PAFL") on 21/12/1991 for a
period of twenty years. An alternative prayer for grant of
compensation on the ground that PAFL could not undertake
acquaculture activities during the period of lease for reasons beyond
its control is also made.
2] Mr. A. A. Kumbhakoni, the learned Senior Advocate for PAFL
submitted that initially on 21/12/1991 a lease agreement was entered
into between the Governor of Maharashtra through the Collector,
Thane as the lessor with the Development Corporation of Konkan
Limited (for short, "DCKL") as a lessee and PAFL as a sub-lessee for the
area admeasuring 600 Hectares and 14 Ares. Pursuant thereto on
27/03/1992, possession of 740 acres out of total of 1,500 acres was
handed over by DCKL to PAFL. The possession of the remaining land
admeasuring about 760 acres was handed over in January, 2002. It
was submitted that after taking over possession of the portion of the
leased area, the activities relating to acquaculture could not be
effectively continued in view of pendency of proceedings before the
Supreme Court in the case of S. Jagannath Vs. Union of India, 1996
INSC 1466 decided on 11/12/1996. It was submitted that in view of
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various restraint orders, PAFL could not utilize the leased area for the
purpose for which it was allotted. It was pointed out that the request
for extension of the period of lease was made prior to the expiry of the
lease period by virtue of the application made on 03/10/2017. No
decision thereon was taken despite various representations made to
the concerned authorities. Recommendations were made by the
Regional Deputy Commissioner of Fisheries on 30/07/2021 as well as
by the Tahasildar and Executive Magistrate, Palghar favouring such
extension. In the said recommendations, it was stated that PAFL did
not commit any breach of the conditions imposed and that extension
of the period of lease was recommended. Ignoring the request for
extension of the lease, a portion of the area developed by PAFL to the
extent of 343 Hectares and 23.40 Ares came to be allotted to UFAPL
on 13/03/2024 without any public auction. The learned Senior
Advocate referred to the Coastal Acquaculture Guidelines and
especially Clause 4.9 thereof to submit that in accordance with the
same, PAFL was entitled for extension of the lease period. A similar
such extension came to be granted to M/s. King Prawns Limited on
22/10/2014 for the adjoining lands. Attention was also invited to the
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Government Resolution dated 23/11/2001 wherein the policy for
granting lease for acquaculture purposes was laid down. It was
incumbent upon the said Authorities to have followed this policy while
making any further allotment especially in favour of UFAPL. Reliance
was also placed on the provisions of the Coastal Acquaculture
Authority Act, 2005 to submit that the allotment made in favour of
UFAPL was not in accordance with law. Since PAFL was questioning
the decision making process itself, this Court ought to interfere in
exercise of writ jurisdiction considering the manner in which the
extension of the lease period was denied to it and allotment was made
in favour of UFAPL.
3] Dr. Birendra Saraf, the learned Advocate General appearing for
the 1st and 3rd respondents opposed the prayers made in the writ
petition. At the outset, he submitted that PAFL was seeking
enforcement of contractual obligations arising out of the agreement of
lease dated 21/12/1991. Various disputed questions would be
required to be adjudicated before considering the prayers made in
the writ petition. It was pointed out that PAFL was merely a sub-
lessee of DCKL which was the principal lessee. The right of extension
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was being claimed by the sub-lessee in the present proceedings
without impleading the principal lessee. Referring to the extension
clause in the agreement dated 21/12/1991, it was submitted that the
right of extension was available only to the lessee and not a sub-
lessee. There was no right whatsoever with PAFL to seek any
extension especially in the light of the fact that the lease granted to it
for a period of thirty years had already expired on 20/12/2021. After
that date, it was not open for PAFL to contend that it was entitled for
extension of the lease period. The grant of 248 Hectares 970 Ares
land was on fresh terms as per Government Resolution dated
13/03/2024. In absence of any legal right whatsoever with PAFL to
seek extension of the lease period, it was not entitled to any relief
whatsoever.
4] Mr. Anil Anturkar, the learned Senior Advocate for UFAPL also
opposed the prayers made in the writ petition. He submitted that at
the end of the lease period on 20/12/2021, PAFL lost its right to
continue to occupy the leasehold area. He questioned the status of
PAFL to occupy the leased area after 20/12/2021 when the initial
lease had expired till 13/03/2024 when a portion of the area leased
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earlier was again granted to it. It was then submitted that though it
was a grievance of PAFL that by virtue of the orders passed by the
Supreme Court it could not utilize the leasehold land since 1995-
1996, such grievance was being raised by it only in October, 2017. In
absence of any vested right with PAFL to seek extension of the lease
period, no writ of mandamus could be claimed by it. In fact, PAFL was
merely seeking to espouse its private contractual right. No relief could
be granted to it in the light of the judgment of the Supreme Court in
Army Welfare Education Society vs. Sunil Kumar Sharma and others ,
2024 SCC OnLine SC 1683. At the highest, it could be stated that
PAFL had only a legitimate expectation that its request for extension of
the lease period could be considered. As regards absence of any
tender process being adopted for granting of area admeasuring 343
Hectares and 23.40 Ares to UFAPL, it was submitted that the
allotment made in favour of PAFL to the extent of the area
admeasuring 248 Hectares and 970 Ares was also without issuance of
any tender. PAFL was also the beneficiary of the same process. Thus
it was submitted that in the absence of any legal right whatsoever, no
relief could be granted to PAFL and the writ petition was liable to be
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dismissed.
5] We have heard the learned counsel for the parties at length and
with their assistance we have perused the documents on record.
Having given thoughtful consideration to the rival submissions, we are
of the view that PAFL is not entitled to any discretionary relief under
Article 226 of the Constitution of India.
PAFL has sought two-fold reliefs in this writ petition. It seeks to
challenge the grant of lease of area to the extent of 343 Hectares and
23.40 Ares in favour of UFAPL and thereafter prays that it be granted
an extension of lease for the entire area to the extent of 600 Hectares
and 14 Ares. The grant of lease for undertaking activities of prawn
culture is presently governed by the policy of the State Government
by virtue of Government Resolution dated 23/11/2001. The DCKL is
the principal lessee while the State Government is the lessor. The
terms of the initial lease-deed dated 21/12/1991 indicate that any
future extension of the lease was to be made with the consent of the
principal lessee, DCKL. Keeping these aspects in mind, the entitlement
of PAFL to the reliefs claimed would have to be considered. We may
state that in this regard, the writ Court would be more concerned with
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the decision making process adopted by the State authorities rather
than the correctness of the actual decision taken. As a lessor, the State
is entitled to decide whom to lease its lands provided the same has
been done in fair and transparent manner.
6] At the outset, we may consider the prayer for extension of lease
as made by PAFL for the reason that if PAFL makes out a case for grant
of this prayer, the challenge to the grant of lease to UFAPL would be
required to be gone into. However, if PAFL is not found entitled to
such relief, the prayer for cancelling the lease granted to UFAPL
would be rendered academic as no consequential relief could be
granted to PAFL. Prayer clause (c) in the writ petition reads as
under :-
"(c) That this Hon'ble Court be pleased to direct the
first respondent to extend the lease period of the
land in issue allotted to the petitioners for a
further period of twenty years on account of
reasons mentioned in the applications at Exhibits J
& L), which will be in conformity with decision
taken in respect of the lease extension proposal of
Kings Prawns Pvt. Ltd. (Exhibit-I)."
. In this regard, it can be seen from the record that the duration of
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the lease initially granted to PAFL on 21/12/1991 was for a period of
thirty years and the same was to come to an end on 20/12/2021. On
13/10/2017, PAFL made an application seeking extension of the said
lease in respect of the entire area admeasuring 600 Hectares 14.10
Ares. The said issue was under consideration and on 24/05/2021, the
Revenue and Forest Department sought an opinion in this regard from
the DCKL. The matter was considered by DCKL and in its
communication dated 26/08/2021, it stated that since the inception of
the lease granted to PAFL, no benefit had accrued to DCKL. It was
running in losses and it's share value was zero. As per the letter issued
by the Company Secretary on 05/05/2018, DCKL had to suffer a loss
of Rs.81,90,000/-. The loss till date was Rs.90,00,000/-. It therefore
opined that the entire leasehold area of 600 Hectares be immediately
taken back from PAFL and the investment to the extent of
Rs.37,00,000/- made by DCKL be also returned.
. This report of DCKL was considered by the Ministry of
Industries, Power and Labour. It observed on 15/10/2021 that the
amounts due from PAFL be examined and an opportunity be given to
it to clarify its position. It was thereafter resolved to take back
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possession of 343 Hectares 23.40 Ares land while permitting PAFL to
retain 248 Hectares 9.70 Ares land for a further period of thirty years.
This was subject to various terms and conditions indicated in the
Government decision dated 13/03/2024.
7] The material on record indicates that the application made by
PAFL on 13/10/2017 was taken into consideration and in the light of
the fact that DCKL as the principal lessee was desirous of seeking
recovery of its dues, extension of lease only for 248 Hectares 9.70
Ares came to be granted. The extension of lease granted to M/s. Kings
Prawns Private Limited cannot be the basis for PAFL to seek a similar
extension in the light of the fact that PAFL is not similarly situated as
M/s. Kings Prawns Private Limited. In any event, we find that in the
matter of extension of the lease, the interest of the lessor which in the
present case is the State Government is required to be kept in mind
and its view is entitled to primacy. It is entitled to some free play in
the joints in such matter. We do not find that there is any arbitrariness
on the part of the State Government in granting extension of the lease
to PAFL only to the extent of 343 Hectares 23.40 Ares. Hence, the
relief sought by PAFL with regard to prayer clause (c) cannot be
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granted.
8] Prayer clause (d) in the writ petition reads as under :-
"(d) Strictly in the alternative, that this Hon'ble Court be
pleased to direct the first respondent to grant
compensation to the petitioners in terms of pleading
contained in Ground (H) of the present petition."
. We are not inclined to consider this prayer in exercise of writ
jurisdiction since various factual aspects would require adjudication
before coming to a conclusion as to whether PAFL is entitled to receive
compensation on the grounds raised by it. This claim being opposed
by the State Government, adjudication of the same without recording
evidence would not be possible. Hence, we are not inclined to
consider this prayer in exercise of writ jurisdiction. PAFL is at liberty
to pursue this prayer in the Civil Court.
9] Prayer clause (b) in the writ petition reads as under :-
"(b) That on perusal of the same, this Hon'ble Court by
an appropriate writ, order and/or direction be
pleased to quash and set aside the impugned
Government Resolution dated 13th March 2024
(Exhibit-P), the same being violative of Article 14 of
the Constitution of India."
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It is to be noted that on 13/03/2024, the Revenue and Forest
Department issued two Government Resolutions. By the first
Government Resolution, PAFL was granted an extension of lease for a
period of thirty years in respect of area admeasuring 248 Hectares
09.70 Ares out of the total area of 600 Hectares 14.10 Ares land. PAFL
had been initially granted the lease of the area admeasuring 600
Hectares 14.10 Ares on 21/12/1991. This lease expired on
20/12/2021. On 13/03/2024, by virtue of another Government
Resolution, area admeasuring 343 Hectares 23.40 Ares land was
allotted to UFAPL. This lease is also for a duration of thirty years on
the terms and conditions laid down in Government Resolution dated
23/11/2001.
10] Before considering the contention raised on behalf of PAFL that
UFAPL was not entitled to be allotted a portion of area from 600
Hectares 14.10 Ares land that was initially allotted to it, it would be
necessary to examine as to whether there is any right in PAFL to seek
extension of lease for the entire area. If such right is not found to
enure in PAFL, it would not be in a position to contend that part of the
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area could not have been allotted to another entity. It is seen from the
record that with a view to promote prawn culture in the State, the
Industries, Energy and Labour Department formed the DCKL. It was to
act as a lessee of the Government to enable the leased areas to be used
for promoting prawn culture along with joint sector companies. It was
the principal lessee of the Government and was empowered to sub-
lease areas to joint sector companies. The lease granted to PAFL
indicates that at the expiry of the lease period of thirty years, the right
of extension was with the lessee. There was no separate right
conferred on the sub-lessee in that regard. The lease entered on
21/12/1991 with the PAFL came to an end in 20/12/2021. The
material on record indicates that DCKL as the principal lessee was not
inclined for justifiable reasons to seek renewal of the sub-lease of
PAFL. Commercial considerations weighed with it while taking such
decision in view of the fact that DCKL suffered losses pursuant to the
initial grant of sub-lease in favour of PAFL. It was urged that the
recommendations contained in the minutes of the meeting conducted
by the Revenue and Forest Department in May 2021 were not taken
into consideration while deciding not to extend the lease in favour of
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PAFL. It is however seen from the record that DCKL by its
communication dated 26/08/2021 clearly indicated the reasons why it
was opposing the extension of such lease. The matter was thereafter
considered by the Department of Industries, Power and Labour in
September, 2021 and explanation on various relevant aspects was
sought from PAFL. It is after considering all the relevant material that
a decision was taken on 13/03/2024 to grant an extension of lease to
PAFL only with regard to the area admeasuring 248 Hectares 09.70
Ares. We do not find that there has been any arbitrariness or
irregularity in the matter while refusing to extend the lease for the
entire area admeasuring 600 Hectares 14.10 Ares in favour of PAFL.
Financial considerations brought on record by DCKL have been taken
into consideration while taking such decision. In absence of the
principal lessee agreeing to such extension for the entire area, we do
not find that the decision not to extend the lease for the entire area in
favour of PAFL deserves to be interfered with.
11] It is to be noted that the lease in favour of PAFL came to an end
on 20/12/2021. Though in effect the Government Resolution dated
13/03/2024 continuing the lease in favour of PAFL in respect of area
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to the extent of 248 Hectares 09.70 Ares states that it is an extension
of the lease, it appears to be in the nature of a fresh grant of lease in
favour of PAFL. The said Government Resolution does not refer to the
period from 01/01/2022 to 13/03/2024 as being included in the
fresh grant so as to treat the same as an extension of the earlier grant.
The terms and conditions stipulated under Government Resolution
dated 23/11/2001 are required to be complied with. It is thus clear
that on 13/03/2024, the Revenue and Forest Department issued two
separate Government Resolutions allotting separate areas to PAFL and
UFAPL. It is true that the land allotted to UFAPL forms part of the total
area that was initially granted to PAFL on 21/12/1991 but that aspect
would not be very relevant in this context.
Once it is found that PAFL was not entitled to the extension of
the period of lease for the entire area, there would be no reason for
PAFL to challenge the grant of lease to UFAPL for a portion of that
area. The State Government was entitled to take a fresh decision after
considering the stand of the principal lessee, DCKL.
It was also urged on behalf of PAFL that all the stipulations
under Government Resolution dated 23/11/2001 were not followed
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while allotting area admeasuring 343 Hectares 23.40 Ares in favour
of UFAPL. It is to be noted that PAFL is also a beneficiary of a similar
decision wherein it has been held entitled to a lease for area
admeasuring 343 Hectares 23.40 Ares. It is not the case of PAFL that
pursuant to any auction held, it has been granted lease of area
admeasuring 248 Hectares 09.70 Ares. We therefore do not find any
justifiable reason to hold that the grant of lease to the extent of area
admeasuring 343 Hectares 23.40 Ares in favour of UFAPL is either
illegal or arbitrary.
12] As regard the contention raised on behalf of PAFL that the
portion of area allotted to UFAPL had been developed by it and hence
UFAPL would get fruits of such development, it would be open for
PAFL to claim damages for the same if so advised. On that ground, it
cannot be said that grant of lease in favour of UFAPL is bad in law. In
absence of any right in favour of PAFL to seek extension of such lease
coupled with the fact that it is also a beneficiary of the decision of the
State Government to grant it lease for a portion of the area, no fault
can be found with the Government Resolution dated 13/03/2024 by
which land admeasuring 343 Hectares 23.40 Ares has been granted to
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UFAPL. The learned Senior Advocate for UFAPL is justified in relying
upon the observations in paragraphs 48 and 49 of the decision in
Army Welfare Education Society (supra), wherein it has been observed
as under :-
48. A reading of the aforesaid decisions brings forth the following
features regarding the doctrine of legitimate expectation:
a. First, legitimate expectation must be based on a right as
opposed to a mere hope, wish or anticipation;
b. Secondly, legitimate expectation must arise either from an
express or implied promise; or a consistent past practice or custom
followed by an authority in its dealings;
c. Thirdly, expectation which is based on sporadic or casual or
random acts, or which is unreasonable, illogical or invalid cannot be
treated as a legitimate expectation;
d. Fourthly, legitimate expectation operates in relation to both
substantive and procedural matters;
e. Fifthly, legitimate expectation operates in the realm of public
law, that is, a plea of legitimate action can be taken only when a
public authority breaches a promise or deviates from a consistent
past practice, without any reasonable basis.
f. Sixthly, a plea of legitimate expectation based on past practice
can only be taken by someone who has dealings, or negotiations
with a public authority. It cannot be invoked by a total stranger to
the authority merely on the ground that the authority has a duty to
act fairly generally.
49. The aforesaid features, although not exhaustive in nature, are
sufficient to help us in deciding the applicability of the doctrine of
legitimate expectation to the facts of the case at hand. It is clear that
legitimate expectation, jurisprudentially, was a device created in
order to maintain a check on arbitrariness in state action. It does
not extend to and cannot govern the operation of contracts between
private parties, wherein the doctrine of promissory estoppel holds
the field.
13] Thus, having considered the material on record, we are satisfied
that no case has been made out by PAFL for this Court to interfere in
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exercise of writ jurisdiction under Article 226 of the Constitution of
India. The writ petition therefore fails. It is accordingly dismissed and
the Rule is discharged with no order as to costs.
14] At this stage, the learned counsel for the petitioners seeks
continuation of the interim relief. This request is opposed by the
learned counsel for the respondents. In the facts of the case, the
present judgment shall operate after a period of four weeks from the
date it is uploaded.
[ RAJESH S. PATIL, J. ] [ A.S. CHANDURKAR, J.]
