(Damodar Prasad Agarwal vs State Of West Bengal & Ors.)
2022 Latest Caselaw 462 Cal

12
jdt.




       10.02.2022
        jb.

                                 W.P.A. 3443 of 2019
                    (Damodar Prasad Agarwal vs. State of West Bengal & Ors.)


                     Mr. Partha Chakraborty
                     Ms. Sharmistha China
                                ... For the Petitioner

                     Mr. Satyajit Talukder
                     Mr. Abhishek Sarkar
                                ... For the KMDA



                           The factual aspect of the matter as made out in the writ

                    petition and submitted on behalf of the parties has been recorded in

                    the order dated 28th January, 2022 as hereunder:



                                 "The contention of the petitioner is that he was granted

                         licence in respect of the property in question by the Kolkata

                         Metropolitan Development Authority by virtue of deed dated

                         11th December, 1996 and was handed over possession of the

                         said property by virtue of possession certificate on 23rd May,

                         1997. The petitioner was unable to raise/complete construction

                         of his residential house on the said land in terms of Clause

                         2(iii) of the deed within a period of five years though he

                         deposited the entire licence fee before the Authority which was

                         lastly accepted by the Authority in 2010. On 16th February,

                         2018 a show-cause notice was issued upon the petitioner

                         requiring him to show cause as to why the licence deed would
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not be cancelled on the ground of violation of Clause 2(iii) of

the deed by the petitioner. The petitioner sent a reply to the

said notice on 28th February, 2018 praying for extension of the

period for raising construction. The Authority, by a notice

dated 9th August, 2018 demanded penal charges to the tune of

Rs.99,48,452/- from the petitioner for extension of time to

complete construction till 10th December, 2019. The petitioner

expressed his inability to pay the said amount by a letter dated

5th September, 2018 following which the Authority cancelled

the deed and withdraw possession of the land by a letter dated

31st December, 2018.



        Learned counsel for the petitioner submits that he was

unable to complete the construction on the land in question due

to financial stringency as well as on medical grounds and

admittedly did not approach the Authority for extension of the

said period before expiry of the stipulated time frame.

According to the petitioner, as the Authority accepted lease

rent till 2010, such acceptance amounts to waiver of the right

of the Authority to cancel the deed of licence on the ground of

violation of Clause 2(iii) of the deed by the petitioner, as

according to the said clause, the period for completion of

construction expired in 2001-2002. There being no provision

of imposing penal charges upon the petitioner, the Authority

could not have charged such penalty and as such, the Authority

should be directed to extend the time frame for completion of

construction on the land in question by the petitioner.



        It is submitted on behalf of the Kolkata Metropolitan

Development Authority that pursuant to the show-cause notice
                                     3




      issued by the Authority the petitioner was called for a hearing

      by the Authority and subsequent orders were passed upon

      hearing the petitioner on 1st November, 2018. The petitioner

      did not pray for extension of time before the Authority within

      the stipulated time frame. The policy decision of the Authority

      permits the Authority to impose penal charges on the petitioner

      by way of which the petitioner was given another opportunity

      to retain the land and raise construction therein upon payment

      of the same."



        Learned counsel for the petitioner draws the attention of the

Court to the third paragraph in page 24 (Annexure P/1 to the writ

petition) which demonstrates that in case of default by the licensee

in payment of three consecutive installments of premium and default

to clear the same within six months from the due date, the Authority

shall have the right to determine the agreement and re-enter

possession of the demised premises. Learned counsel points out that

in terms of clause 4(i) of the deed, the Authority was only entitled to

re-enter the premises on breach of any of the terms of the contract

and no specific authority was given to the lessor for determination of

the lease.



        Learned counsel further submits that there being no

provision for demanding penal charges for extension of time to raise

construction in the plot, no such charge could have been claimed by

the Authority. The Authority has, in fact, cancelled the deed upon

the petitioner's inability to pay the penal charges as demanded by

them.
                                     4




       Learned counsel for the petitioner has placed reliance on a

judgment of a co-ordinate Bench of this Court in W.P. No. 1631 of

2010 wherein it is recorded that in absence of any provision for

charges in the lease deed itself, such charges cannot be imposed

upon the lessee by the Authority. The relevant portion of the

judgment is set out:-



               "Under the lease, the appellants were entitled to the

       lease rents during the pendency of the lease. Neither the lease

       deed nor the provisions of the Calcutta Improvement Act, 1911,

       contemplates the levying of transfer-cum-mutation fees. The

       decision of the appellants to impose such charges in lieu of

       granting permission to assign or transfer the lease-hold interest

       in the demised premises appears to be extraneous both to the

       terms and conditions of the lease and the provisions of the

       aforesaid Act."



       In refuting the contention on behalf of the petitioner, learned

counsel for the KMDA submits that the deed was cancelled in terms

of clause 4(i) due to breach of clause 2(iii) by the petitioner. The

Authority, in its meeting dated 1st August, 2017, adopted a policy

decision to safeguard the rights of the lessees defaulting in raising

construction in the leasehold property within the stipulated period of

time. The policy decision says that in case of delayed construction

or non-construction in the leasehold property, cancellation notice

should be issued to the allottee immediately and if the allottee agrees

to pay penal charges for delayed construction at current market
                                    5




value through written prayer against such cancellation notices, a

fresh/modified lease deed shall be executed on payment of the delay

charges by the lessee. Learned counsel submits that the said policy

decision was adopted in addition to the terms of the deed in order to

extend relief/protection to lessees who are in breach of any of the

terms of the contract.



        Learned counsel further submits that the premium deposited

by the lessee has been sought to be refunded to the lessee and

cheque in this regard has already been issued.



       Learned counsel has relied upon the judgments of the

Hon'ble Supreme Court in Barelly Development Authority and

Another vs. Ajai Pal Singh and Others reported in (1989) 2

Supreme Court Cases 116 and in M/s Radhakrishna Agarwal &

Others vs. State of Bihar & Ors. reported in AIR 1977 Supreme

Court 1496 in support of his contention.



       It is not in dispute that the petitioner has failed to raise

construction in the plot in question within five years from the date of

execution of the deed in breach of Clause 2(iii) of the deed. A show-

cause notice was issued upon the petitioner on 16th February, 2018

in this regard and in reply to the said notice, the petitioner prayed for

extension of time for the said construction on the ground that he was

unable to raise construction within the stipulated period of time due

to acute financial crisis and also ignorance of the fact that the deed

may be cancelled due to non-construction within the stipulated time
                                    6




period. Following the said reply dated 28th February, 2018 KMDA

issued a demand notice for penal charges on 9th August, 2018. Upon

the petitioner failing to comply with the notice, the allotment was

cancelled by a notice dated 31st December, 2018.



       It is a fact that the provision of payment of penal charges as

recorded in the policy decision of the Authority is not included in

the deed itself and admittedly such policy decision was not

intimated to the petitioner or the other allottees prior to execution of

the deed or even subsequently. Therefore such policy decision

cannot be given much weight and the deed could not have been

cancelled for non-payment of penal charges as demanded by the

Authority {W.P. No. 1631(W) of 2010} in terms of the policy

decision. Of course, the respondents submit that the lease was

cancelled in terms of clause 4(i) of the deed and not for non-

payment of penalty. The provision for payment of penalty as a pre-

requisite to extension of the period of construction is only an

additional leverage offered to the lessee to rectify his omission .

Be that as it may, even without such demand of penal

charges being taken into consideration, it appears that the deed was

cancelled due to breach of the terms thereof by the petitioner. A

technical lapse in clause 4(i) of the deed has been pointed out by the

petitioner. Such provision enables the Authority to re-enter into the

land upon breach of any of the terms of the deed, but does not

specifically indicate that the lease may be determined by the

Authority. It is needless to say that re-entering of the Authority into

the property presupposes determination of the deed of lease and as

such, it can be inferred that the provision entitles the Authority to

determine the deed of lease in terms of clause 4(i) of the deed and

thereafter re-enter the premises in question.

It has been observed by the Hon'ble Supreme Court in the

case of M/s Radhakrishna Agarwal & Others(supra) as under:

"But, after the State or its agents have entered into the

field of ordinary contract, the relations are no longer governed

by the constitutional provisions but by the legally valid

contract which determines rights and obligations of the parties

inter se. No question arises of violation of Article 14 or of any

other constitutional provision when the State or its agents,

purporting to act within this field, perform any act. In this

sphere, they can only claim rights conferred upon them by

contract and are bound by the terms of the contract only unless

some statute steps in and confers some special statutory power

or obligation on the State in the contractual field which is apart

from contract."

In the judgment in Barelly Development Authority and

Another(supra) Hon'ble Apex Court has held that once the parties

after voluntarily accepting the conditions of the contract enters into

such contract they can only claim the right conferred upon them by

the said contract and are bound by the terms of the contract.

In the case in hand, both the parties are governed by the deed

of lease entered into by and between them on 11th December, 1996.

Admittedly the petitioner failed to raise construction in the demised

land within five years from the date of issuance of the deed in

breach of clause 2(iii) of the deed and no extension was prayed for

before the Authority either within the stipulated period of time or at

all. It was only when the show-cause notice was issued to the

petitioner that he woke up from slumber and chose to raise his claim

for extension before the Authority in the reply submitted by him to

the show-cause notice. The deed has been cancelled by the

Authority in terms of clause 4(i) irrespective of the claim of penal

charges by the Authority. Even if the claim for penal charges is

ignored, the Authority still had the right to cancel the deed in terms

of clause 4(i) thereof and as such, the Authority has acted well

within its rights and jurisdiction. As pointed out by learned counsel

for the respondents, acceptance of license fee by the Authority till

2010 does not preclude the Authority from cancelling the deed in

view of clause 4(iii) of the deed which indicates that "any relaxation

or indulgence granted by the Authority to the LICENSEE or by the

said LICENSEE to the Authority shall not in any way prejudice the

rights of the parties under this Deed of License." It is also submitted

that the Authority has taken steps for refund of the premium

deposited by the petitioner.

In view of the above, this Court is of the view that there is no

illegality or irregularity in the act of the respondent Authority which

calls for intervention by this Court in the present writ petition and as

such, the writ petition is devoid of any merit and is liable to be

dismissed.

Accordingly, W.P.A. 3443 of 2019 is dismissed.

There shall be no order as to costs.

Since no affidavit has been invited, allegations contained in

the writ petition shall be deemed not to have been admitted.

Urgent certified website copy of the order, if applied for, be

given to the parties on compliance of requisite formalities.

(Suvra Ghosh, J.)