Damodar Prasad Agarwal vs State Of West Bengal & Ors
2022 Latest Caselaw 6480 Cal

           IN THE HIGH COURT AT CALCUTTA
                        Civil Appellate Jurisdiction

                            (Appellate Side)

                            M.A.T. 309 of 2022
                                 With
                           I.A. CAN 1 of 2022

                       Damodar Prasad Agarwal

                                  Vs.

                       State of West Bengal & Ors.

Before: The Hon'ble Justice Arijit Banerjee

                   &
       The Hon'ble Justice Rai Chattopadhyay


       For the Appellant                 : Mr. Partha Chakraborty.
                                           Ms. Sharmistha China.


       For the State                     : Mr. Samrat Sen, ld. AAAG.
                                           Mr. Nilotpal Chatterjee.


       For the K.M.D.A                    : Mr. Satyajit Talukdar,
                                           Mr. Abhishek Sarkar.

       Hearing Concluded on               : 27.06.2022

       Judgment On                       : 12.09.2022
                             Page 2 of 24



      Rai Chattopadhyay, J.:




(1)    The sole appellant, since deceased, has been substituted by

       his legal heirs, vide this court's order dated 08.06.2022.

(2)    The appellant/substituted appellants are aggrieved by the

       action of the respondent authority in cancelling the

allotment of a plot granted in favour of the appellant, since

deceased, on December 12, 1996, on the ground of non

fulfilment of the stipulated conditions of agreement and

challenged the cancellation order in the Court of Ld. Single

Judge. However, Ld. Single Bench has not allowed the

prayer of the appellant/writ petitioner and dismissed the

writ petition, vide judgment and order dated February 10,

2022. The appellants are aggrieved by that order of Ld.

Single Bench and have challenged the same in this appeal.

(3) The questions that fall for consideration by this appeal court

are whether the Ld. Single Judge was justified in coming to

the findings in the order impugned; whether or not by the

purported action, the respondent authorities have infringed

any legal or constitutional right of the appellants which was

required to be remedied by an order of the court; whether in

the decision making process, Ld. Single Judge has failed to

consider infringement if any, as mentioned above and has

come to an erroneous conclusion; whether the impugned

judgment and order dated February 10, 2022, is liable to be

set aside or not.

(4) Before discussing the arguments advanced by the respective

parties, the factual background of the case may be narrated

in a nut shell for better understanding of the perspective

thereof, which follows hereunder :

The writ petitioner/appellant, since deceased, was

inducted as a licensee for 99 years in respect of Plot No.268 in

MIG II category in Block B, at East Kolkata Area Development

Project, Phase 1 in Dist:-South 24 Paraganas, measuring

about approximately 173 sq. meter. The license commenced

with effect from the date of execution of the agreement, i.e,

from December 11,1996. The appellant/writ petitioner, since

deceased, duly submitted the consideration money as well as

the subsequent premium amount including the interest. He

was given possession over the land with effect from May

23,1997. The appellant/writ petitioner, since deceased, was

unable to raise/complete construction of his residential house

on the said land in terms of Clause 2 (III) of the deed dated

December 11,1996, within the stipulated period of 5 years. In

spite of that he deposited the entire license fee before the

authority within the year 2010, which was duly accepted by it.

On February 16, 2018, a show cause notice was issued by

the respondent authority to the appellant since deceased,

requiring him to show cause as to why the deed of license

would not be cancelled on the ground of violation of Clause 2

(III), as mentioned above. In reply, the then writ petitioner

(now deceased), prayed for extension of time to raise

construction vide his letter dated February 28, 2018. On

August 9,2018, the authority again sent a letter to the

erstwhile writ petitioner, since deceased, demanding penal

charges to the tune of Rs.99,48,452/- for extension of time to

complete construction i.e, within December 10,2019. As the

writ petitioner exclaimed his inability to pay the penal

amount as calculated by the respondent authorities, the deed

of license in his favour, granted earlier on December 11, 1996,

was cancelled by the authority and the possession of the land

was withdrawn, by its Memo No.1029/K.M.D.A/37 dated

December 31, 2018, issued by the Secretary, K.M.D.A.

(5) Thus being aggrieved by the alleged violation of his legal

and rightful claim, the writ petitioner/appellant, since

deceased, had filed the writ petition being W.P No.3443 (w)

2019 to challenge the impugned memo of the respondent

no.2 dated December 31,2018. After hearing the parties, Ld.

Single Bench has delivered its judgment dated February

10,2022, there by rejecting the writ petitioner's prayer.

(6) In the impugned judgment Ld. Single Judge has inter alia

held that the appellants/writ petitioner has failed to comply

with the terms of the license agreement/deed as the

construction over the demised land could not be raised

within 5 years from the date of issuance of the said deed. It

has been observed that the writ petitioner did not act

proactively to seek additional time from the authority for

due compliance of the terms of the license but only

responded to the show cause notice issued to him on

February 16, 2018. Ld. Single Bench has found that while

cancelling the deed in terms of Clause 2 (III) of the license

deed, the authority has acted within its rights and

jurisdiction, irrespective of the fact whether any penal

charges were claimed or not. It decided that even payment

of license fee by the writ petitioner/appellant since deceased

would not come in the way in case the respondent authority

has taken action upon violation of the terms of agreement

by the appellant/writ petitioner. These reasons prompted

the Court to reach to the decision that the writ petition

would not be maintainable.

(7) The main answering respondents, i.e, respondents no.2, 3

and 4 being Kolkata Municipal Development Authority and

its various other officials, have contested the appeal by filing

affidavit-in-opposition to the stay petition. Respondent has

stated inter alia that it has been continuously following the

rate chart prepared by the Land and Flat Allotment

Committee (L.F.A.C), in its meeting dated October 1, 2012,

which duly propagates regarding penal charges for delayed

construction in respect of residential plots. It has

categorically enumerated the calculations and the break up

by dint of which the penal charge of Rs. 99,48,452/- was

arrived at. The said answering respondents categorically

state that there has been no illegality and irregularity in

their action as alleged and that the appellant is not entitled

to any relief as sought for.

(8) The appellants have argued that they obtained allotment of

the land in question, in accordance with due process of law.

They say that possession of the land was duly handed over

to them and all these happened only after execution of a

proper licence deed dated December 11, 1996. Appellants

state that after expiry of the period of 5(five) years, within

which period they were stipulated to complete the

construction but failed to comply with the said condition,

the respondent authority has never come up requiring him

to comply with the conditions of the license deed or

cancellation thereof. Instead, the respondents accepted

licence fee upto the year of 2010. Thus, according to the

appellants, the respondent authority is now estopped to

claim withdrawal of licence or cancel the licence deed, as it

has done. Hence, the impugned action, by dint of Memo

No.1029/K.M.D.A/37 dated December 31, 2018, is wholly

illegal. Appellants have further stated that claim of penal

charges by the respondent is wholly arbitrary and malafide

in so far as the same was not stipulated in the license deed.

They say that the respondent's action after acceptance of the

licence fee beyond the period of 5(five) years without taking

any action against the appellants would justify appellant's

possession and right over the landed property and

imposition of penal charges by the respondents beyond the

scope of the agreement between the parties, is an after

thought and arbitrary action which jeopardises the

appellant's rightful claim and possession over the property

in question. The appellants further state that Ld. Single

Judge, in the judgment impugned, failed to appreciate the

facts in their proper perspective, has wrongly directed

himself not to understand the prejudice to the appellants

and has come to a wrong finding and decision. Appellants

pray for setting aside of the order impugned dated February

10, 2022.

(9) Per contra the respondent authority justifies its action by

pointing out firstly that the appellants have failed to comply

with the stipulated condition of the licence deed executed

between themselves to have a construction made within

5(five) years of execution of the said deed dated December

11, 1996. Respondents have further relied on the decision of

Land and Flat Allotment Committee (L.F.A.C) dated

October 1, 2012, to state that the penal charges have been

levied in case of the appellants, in accordance with the

policy decision and there is no element of arbitrariness in

the same as alleged or at all. Respondents support the

impugned judgment of Ld. Single Judge to the effect that

the terms of licence deed are violated and as per stipulations

in the deed, the same is liable to be cancelled in view of such

violation. Respondents have urged that there may not be

any interference with the judgment impugned.

(10) The facts (i) that a licence deed was executed between the

parties on December 11, 1996, (ii) that the possession of the

land in question was handed over to the appellant (since

deceased) on May 23, 1997, (iii) that the appellant paid the

consideration money and the subsequent premium amount

with interest applicable, (iv) that the appellant failed to

make any construction on the land within a period of 5(five)

years from the date of execution of the deed, (v) that the

respondent claimed penal charges which the appellant has

refused to pay, and (vi) that the respondent cancelled the

licence deed and withdrew possession of land vide its letter

dated December 31, 2018 - are facts admitted by the parties

in this appeal.

(11) Relevant portions of the licence deed dated December 11,

1996 may be set out as hereunder :

2(iii)At the own cost of the LICENSEE within five years from the date hereof or within such further time as the authority may at its option allow in writing on sufficient and reasonable grounds, to erect, construct and complete a house or building on the said land for being used for residential purposes with boundary walls, sewers and drains in accordance with plans, sections and specifications as may be approved by the appropriate body according to the rules and regulations framed for the purpose.

(12) The other clauses of the agreement may be of some

relevance, as narrated below :

2(i)(b)The LICENSEE shall be liable to pay to the Authority the charges as may be imposed by the Authority from time to time in respect of the said land and in such cases where the said payments are not made within due dates then the Authority shall be at liberty to determine the LICENCE hereby granted after due notice.

4(i)If the premium hereby agreed or any part thereof shall remain unpaid for six months after becoming payable (whether formally demanded or not) or if there by any breach of any covenant on the LICENSEE's part herein contained and to be performed or observed or any of the terms and conditions hereof then in the said cases it shall be lawful for the Authority at any time thereafter to re-enter upon the said land or any part thereof in respect of- any breach of the LICENSEE's covenants herein contained.

4(iii) Any relaxation or indulgence granted by the Authority to the LICENSEE or by the said LICENCEE to the Authority shall not in any way prejudice the rights of the parties under this Deed of LICENCE.

(13) Appellant admits not to have complied with clause 2(iii) of

the deed, as mentioned above. However, he claims that the

respondents are estopped to espouse their rights under the

said deed to cancel the allotment in case of noncompliance

by the appellant of its stipulations, as the respondent

authority has not been prompt in taking action, accepted

fees and allowed the appellant to retain the land beyond

such period of time.

(14) The deed of licence does not stipulate the time within which

the respondent authority should act, in case of

noncompliance of the settled clauses in the deed. However,

certain actions including cancellation of the deed have been

stipulated therein upon noncompliance of the terms. The

deed does not even specify any action like acceptance of fees

by the authority, during the period from the date of expiry of

five years span from the date of execution of the deed, till

the date of taking action by the authority, to determine the

fate of the contract in any other way, than to be terminated

on the ground of noncompliance. Therefore, the appellant,

being bound by the terms of the said deed, is found to have

argued the point, not to the satisfaction of this court.

(15) Here this court should also meet the point, whether

concerning a contract between the parties, the appellant is

right or not in espousing his cause before this court of

equity.

Rights and responsibilities of the respective parties in this

case arise out of the agreement/ contract entered into

between them on December 11, 1996. Appellant is aggrieved

by respondent's alleged inaction/ non compliance of the

terms of the said agreement. Admittedly their relationship is

governed by the said terms of the deed dated December 11,

1996. The observation of the Apex Court on this aspect as

held in the case of M/S Radhakrishna Agarwal& Others vs.

State of Bihar & Others reported in AIR 1977 SC 1496, may

be relied on, which is as follows:

"After the State or its agent 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 any of 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 confer some special statutory power or obligation on the State in the contractual field which is apart from contract".

Another Apex Court verdict may also be relied upon,

i.e, Barelly Development Authority and Another vs Ajay

Pal Singh and Others reported in (1989) 2 SCC 1496 wherein

it has been held that once the parties after voluntarily

accepting the conditions of the contract enter 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.

Findings of the Apex Court as mentioned above,

squarely apply in case of the appellant/appellants. Hence,

decision may be arrived at that the appellants could not

have maintained their case successfully in a court of equity.

(16) Finally, we may discuss the point raised by the appellants

that the respondent authorities could neither claim penal

charges as the same was not envisaged in the deed as

entered into between the parties nor could they terminate

the agreement due to non payment of such penal charges by

the appellants.

As discussed earlier, after handing over possession of land

to the appellant on May 23, 1997, the respondent authorities

issued a letter to him, dated February 16, 2018, to show

cause, reason being non fulfilment by him of the terms of

the deed, i.e, his inaction in completing the construction

within five years of allotment of the land. Appellant replied

with the request to extend such time for him.

Respondent authority says that during the period from

allotment of land to the appellant, till the time he requested

for extension of time for him, the authority has undertaken

a policy to allow extension of time for any allotee, in lieu of

'penal charges'. Such policy was formulated on October 1,

2012, pursuant to the decision of the Land and Flat

Allotment Committee (L.F.A.C). Obviously no such term

was mentioned in the license deed dated December 11, 1996,

entered into between the parties and the appellant had no

knowledge of such a policy of the respondent authority. In

such circumstance, the appellant raises the question if such

policy of the respondent could be applicable to him.

A recent decision of the Supreme Court may be mentioned,

i.e, Punjab State Power Corpn. Ltd. v. Emta Coal Ltd.,

(2022) 2 SCC 1, wherein the Hon'ble Court has been pleased

to determine that the decision-makers' freedom to change

the policy in public interest cannot be fettered, that so long

as the Government does not act in an arbitrary or in an

unreasonable manner, the change in policy does not call for

interference by judicial review; that if the decision of the

authority is not vitiated by illegality, irrationality or

procedural impropriety, the same should not be interfered

with by the Court.

In this case the change in policy decision by the authority

shall withstand the tests as enunciated by the Apex Court in

the judgment mentioned above in absence of any challenge

to the same. Therefore, the appellant's plea of prejudice,

having been bedevilled with 'penal charges' without any

prior knowledge about the same shall also not be

substantiated and succeed.

Pertinent to mention here that clause 2(i)(b)of the license

deed dated December 11, 1996, as mentioned above,

categorically provides for imposition of charges by the

authority, liability of the allotee to pay the same and right of

the authority to terminate allotment in case of failure by the

allotee to pay the same. This provision of the deed will also

operate against the appellant/appellants.

Under these facts and circumstances, change in

policy made by the concerned authority in the midst of the

period of subsistence of the agreement between the parties

and its implementation cannot be held to be improper or

illegal. There is no doubt about the correctness of the

findings of Ld. Single Judge that respondent's action of

termination of lease deed falls within the purview of the

terms and conditions of the contract entered into between

the parties, upon non-fulfilment of the terms of covenant

and irrespective of payment or non-payment of the 'penal

charges' by the appellants. Even the appellants could not

have embraced success, had their allotment been terminated

due to non-payment of said 'penal charges'. Needless to

mention here that the terms of the licence deed dated

December 11, 1996, have independent application, in case of

violations as stipulated and would not necessarily require to

be qualified with any further conditions.

(17) Discussions as made above would indicate the findings of

this court regarding the legality and propriety of the

judgment of Ld. Single Judge, dated February 10, 2022 and

the same is hereby affirmed.

(18) The present appeal being MAT 309 of 2022 is dismissed.

Arijit Banerjee, J.:

(1) I have had the advantage of reading the judgment of my

Sister Justice Rai Chattopadhyay. While agreeing with the

conclusion reached by my learned Sister, I take this

opportunity to add a few words.

(2) The Deed of Licence executed by KMDA in favour of the

appellant essentially constituted a contract between the

appellant and KMDA. The contractual relationship between

the two parties were to be governed by the terms of the

contract. One of the conditions of the Licence Deed was that

the licensee/allottee of the plot of land in question would

construct a building on the land within five years from the

date of the Licence Deed. Admittedly the appellant failed to

make any construction within the stipulated time period or

even long thereafter.

(3) The Licence Deed was dated December 11, 1996. Hence, the

appellant was contractually obliged to put up a building on

the land in question by December 10, 2001. He failed to

make any construction within that time or thereafter. On

February 16, 2018, a show-cause notice was issued to him by

KMDA calling for an explanation as to why the licence

should not be cancelled. The appellant requested for

extension of time for complying with the stipulation in the

Licence Deed as regards constructing a building within 5

years from the date of the Licence Deed. By a letter dated

August 9, 2018, KMDA demanded penal charges in the sum

of Rs. 99,48,452/- for granting extension of time for putting

up the building within December 10, 2019. Upon the

appellant expressing his inability to make such payment, by

its memo dated December 31, 2018, KMDA cancelled the

Deed of Licence and possession of the land in question was

withdrawn. This was under challenge before the learned

Single Judge.

(4) The relationship between the appellant and K.M.D.A. was

purely contractual. The appellant was admittedly in breach

of a contractual term. The contract/Licence Deed authorised

KMDA to cancel the Licence Deed upon breach by the

appellant of any of the covenants in the Licence Deed.

KMDA exercised such right and cancelled the Licence Deed.

Prior thereto, in terms of a policy formulated by KMDA, it

agreed to accede to the appellant's request for extension of

time for making construction upon payment of penal

charges. The appellant pleaded inability to pay such charges.

Thereupon KMDA cancel the licence.

(5) In my opinion, KMDA need not have shown any indulgence

to the appellant and the indulgence shown did not in any

way affect its contractual right to terminate the licence.

While operating in the realm of a private contract having no

statutory flavour, like in the present case, the State or a

Statutory Authority should be allowed to act as any other

private party and there action should not be interfered with

lightly as being unreasonable or arbitrary.

(6) The Competent Authority in K.M.D.A. has framed a

schedule of charges to be levied on defaulting allottees of

land as a pre-condition for extension of time to make

construction. It is a financial policy of a statutory authority

with which the writ court should not easily interfere. The

schedule of charges in terms whereof KMDA demanded

money from the appellant for granting extension of time to

make construction, is not under challenge in the present

proceedings.

(7) There is also a clause in the licence deed to the effect that

any relaxation granted or indulgence shown by KMDA to the

licensee shall not in any way prejudice the rights of the

parties under the Licence Deed. KMDA offered to extend

time for construction against payment of charges. Such offer

was not accepted. This indulgence shown by KMDA in no

manner affected its right to repossess the land in question

upon termination of the licence in view of the appellant's

failure to make construction on the land within the

contractually stipulated period or even much beyond such

time.

(8) Accordingly, in my considered view, there is no infirmity in

the order under appeal. The appeal deserves to be and is

dismissed.

(9) Interim order, if any, stands vacated. Application, connected

with this appeal, if any, stands disposed of.

(10) Urgent certified website copies of this judgment, if applied

for, be supplied to the parties subject to compliance with all

the requisite formalities.

(Rai Chattopadhyay, J.) (Arijit Banerjee,J.)