Ahmedabad Gymkhana Club vs Union Of India
2023 Latest Caselaw 490 Guj

     C/LPA/29/2023                           JUDGMENT DATED: 17/01/2023




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            R/LETTERS PATENT APPEAL NO. 29 of 2023
                              In
         R/SPECIAL CIVIL APPLICATION NO. 9772 of 2021
                             With
     CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of 2023
                              In
            R/LETTERS PATENT APPEAL NO. 29 of 2023
==================================================
                     AHMEDABAD GYMKHANA CLUB
                              Versus
                          UNION OF INDIA
==================================================
Appearance:
MR MIHIR JOSHI, SENIOR ADVOCATE WITH
MR SALIL M THAKORE(5821) for the Appellant(s) No. 1
MR DEVANG NANAVATI, ADDITIONAL SOLICITOR GENERAL OF INDIA
WITH MR ANKIT SHAH(6371) for the Respondent(s) No.1, 2, 3
==================================================

 CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
       ARAVIND KUMAR
       and
       HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI

                         Date : 17/01/2023
                         ORAL JUDGMENT

(PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR)

1. Though matter is listed for admission, learned Senior

Advocate appearing for the appellant Mr. Mihir Joshi has

submitted arguments on the main appeal extensively and

respondents who are on caveat and represented by Mr. Devang

Nanavati, learned Additional Solicitor General of India for

respondent Nos.1 to 3 has also addressed arguments on main

matter. Hence, we have taken up the appeal on merits and

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disposed of by this order.

2. Respondent herein who is the writ applicant was granted

land bearing Survey No.109 admeasuring 1.77 acre in the

cantonment area of Ahmedabad on lease for a period of 30 years

which was renewable upto 90 years by registered lease deed

dated 12.1.1932. Same was renewed on 1.10.1962 for a further

period of 30 years. Thereafter petitioner applied for renewal of

lease in 1992 and no formal decision has been communicated to

the petitioner in this regard.

3. A show cause notice came to be issued on 9.1.2017 by

respondent No.2 herein to the appellant alleging writ applicant

was carrying on certain activities in violation of the terms of the

lease. Said notice was duly replied on 6.2.2017. After few years,

i.e. 25.6.2021, petitioner was served with a termination order in

furtherance of the show cause notice issued on 9.1.2017 stating

thereunder that lease had been terminated on the ground that

the activities mentioned therein amounts to commercial use of

the club and not bona fide activities of the club and same being

in violation of clause 1 (6) of the Lease Deed dated 12.1.1932. A

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representation came to be submitted by the petitioner on

29.6.2021 in response to the termination of tenancy dated

25.6.2021. On account of alleged obstruction caused by the staff

and officers of respondent No.2, Special Civil Application

No.9772 of 2021 came to be filed before this Court, inter alia,

for the following reliefs:

"33A) That the Hon'ble Court be pleased to issue a writ, order or direction quashing and setting aside Order No. DEO/ 1028/IV dated 25.06.2021 passed by the Defence Estates Officer, Gujarat Circle, Ahmedabad-4: and eviction notice dated 04.08.2021 by the Defence Estates Officer, Gujarat Circle, Ahmedabad-4.

B) That pending the hearing and final disposal of this petition, the Hon'ble Court be pleased to stay Order No. DEO/1028/IV dated 25.06.2021 passed by the Defence Estates Officer, Gujarat Circle, Ahmedabad-4 and restrain the respondents the respondents from obstructing the petitioner, its staff, officers, members, etc. from entering the club premises and using the club facilities in any manner whatsoever and from obstructing the regular functioning of the club in any manner: and eviction notice dated 04.08.2021 by the Defence Estates Officer, Gujarat Circle, Ahmedabad-4.

C) For ad-interim reliefs in terms of prayer B.

D) For such other and further reliefs as the Hon'ble Court may deem just and proper in the facts and circumstances of the case:"

4. During the pendency of the petition, the writ applicant

moved an application for extension of lease which came to be

considered and rejected by communication dated 20.5.2022 on

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the ground that vide termination order dated 25.6.2021, the

lease of the petitioner had been determined. Hence, amendment

of the prayer in the Special Civil Application No.9772 of 2021

was sought for which came to be allowed and as such petitioner

amended the Special Civil Application No.9772 of 2021 and also

sought for quashing of the order dated 20.5.2022.

5. In the interregnum, the learned Single Judge granted stay

of the notice dated 25.6.2021 vide order dated 26.8.2021.

Subsequently, by impugned order dated 21.11.2022, petition

came to be dismissed on the ground that lease was never a

matter of right; the lease had not been renewed in terms of the

contract; an automatic extension of lease as per the interim

extant policy dated 10.3.2017 itself will not be entitled to be

claimed by the petitioner to invoke remedy for enforcement of

such policy in exercise of powers vested under Article 226 of the

Constitution of India; the heart of the dispute is with regard to

the relationship between lessor and lessee which is in the realm

of a contract and the relationship of the parties is governed by

the terms of the agreement which cannot be adjudicated in

Article 226 proceedings; even otherwise the notice issued under

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section 4 of the Public Premises (Eviction of Unauthorised

Occupants) Act, 1971, action is yet to be taken as contemplated

under section 5 of the Act and even thereafter a remedy is

available under section 9 of the Act. Hence, a petition under

Article 226 cannot be used to surpass the remedy so available

for these myriad reasons as enumerated in paragraphs 6 to 8 of

the order under challenge, Special Civil Application No.9772 of

2021 came to be rejected. Hence, this intra-court appeal.

6. We have heard the arguments of Mr. Mihir Joshi, learned

Senior Advocate appearing for the appellant and Mr. Devang

Nanavati, learned Additional Solicitor General of India

appearing for respondent Nos.1 to 3.

7. The contention of Mr. Mihir Joshi, learned Senior Advocate

is that the order terminating the tenancy dated 25.6.2021 is

erroneous and liable to be set aside on the ground of same

being in violation of principles of natural justice. It is contended

that said order has been passed without issuing notice to the

writ applicant; it is a cryptic and unreasoned order and same

has been passed without taking into consideration the reply that

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had been submitted on 9.2.2017 to the show cause notice. It is

also contended that said order has been passed on the basis of a

borrowed opinion. It would also contend that the order of

termination of the lease is on absurd grounds and it is arbitrary,

unreasonable, unfair and violative of Article 14 of the

Constitution of India. He would submit that the reason alleged

for termination neither violates condition No.1(6) or any other

clause of the lease deed. He would submit that none of the

grounds mentioned in the notice amounts to violation of lease

condition even assuming that such activities were carried out by

the petitioner, inasmuch as there are regular activities of the

club which was for the benefit of the members. He would also

contend that the charges of guest fee entry is a regular practice

in all clubs and is enforced to off-shoot extra cost and

discourage regular visits by guests. He would contend that the

learned Single Judge ought to have set aside the termination

order as it was extensively harsh and violative of doctrine of

proportionality.

8. He would contend that respondents are gone by the policy

of the Government of India whereunder it stipulates for

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

condonation of breaches / granting relaxation and as such the

impugned order of termination is without application of the said

policy and as such the impugned order dated 20.5.2022 ought to

be set aside. He would also contend that renewal is a matter of

policy and not a mere contract and appellant was seeking

renewal under the policy and not under the contract and as

such he would contend that respondent authorities could not

have rejected the prayer of the appellant for renewal on the

ground that the termination order dated 25.6.2021 determining

the lease had been passed, particularly when the order dated

25.6.2021 had been stayed. This process adopted by

respondents amounts to overreach the orders of the Court.

Mere pendency of litigation cannot be a ground to decline the

renewal of lease and particularly when the termination order

dated 25.6.2021 had been stayed. Hence, on these grounds, he

seeks for allowing the appeal and prays for setting aside the

order of the learned Single Judge and seeks for allowing the

Special Civil Application by granting prayers sought for therein.

9. Per contra, Mr. Devang Nanavati, learned Additional

Solicitor General of India appearing for the respondents would

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

support the impugned order by contending that the writ

application itself was not maintainable since what is sought to

be enforced is a contractual obligation and as such the learned

Single Judge has also rightly held that the petition itself was not

maintainable to enforce the contractual obligations. He would

further contend that the order dated 25.6.2021 whereby the

lease had been determined cannot be the subject-matter of

scrutiny or examination in a proceeding under Article 226 of the

Constitution of India, as also the prayer for quashing the

communication dated 20.5.2022 whereunder the prayer for

extension of lease had been rejected. Hence, he prays for

dismissal of the appeal.

10. Having heard the learned advocates appearing for the

parties and on perusal of the records, we are of the considered

view that following point would arise for consideration:

(1) Whether order passed by the learned Single Judge dated 21.11.2022 in Special Civil Application No.9772 of 2021 suffers from any infirmity either in law or on facts whatsoever calling for our interference?

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

11. Having heard the learned advocates appearing for the

parties and after bestowing our careful and anxious

consideration to the rival contentions raised at the bar, the

undisputed facts which would emerge from the records are:

(i) A registered Lease Deed had been executed by

respondent No.2 in favour of writ applicant on

12.1.1932 whereby the land admeasuring 1.77 acre,

situated in Survey No.109 in cantonment of

Ahmedabad City was leased to the petitioner for a

period of 30 years, which was renewable upto 90

years;

(ii) The said lease coming to an end on completion of 30

years was renewed on 1.10.1962 for further period

of 30 years i.e. upto 30.9.1992;

(iii) In 1992, petitioner applied for renewal, for which no

reply was forwarded by the respondents. In other

words, the lease was not renewed;

(iv) On 9.1.2017, a show cause notice came to be issued

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

to the petitioner as to why the lease should not be

terminated for the reasons indicated therein;

(v) On 6.2.2017, respondent replied to the said show

cause notice;

(vi) On 25.6.2021, lease came to be terminated on the

ground of alleged violation of the terms of lease

conditions;

(vii) On 29.6.2021, petitioner submitted a representation

against the termination order;

(viii) On 5.7.2021, Special Civil Application No.9772 of

2021 was filed for quashing the communication

dated 25.6.2021 whereunder there was termination

of lease by respondent No.2 by calling upon

petitioner to quit vacate and deliver vacant

possession of the demised premises;

(ix) On 26.8.2021, an interim order came to be passed by

the learned Single Judge whereunder respondents

were restrained from obstructing petitioner, staff

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

members and members, etc. for entering the club or

obstructing the regular functioning of the club and

the eviction notice dated 4.8.2021 issued under the

Public Premises (Eviction of Unauthorised

Occupants) Act, 1971;

(x) On 24.3.2022, an online application was submitted

by petitioner for extension of lease and physical copy

was submitted on 31.3.2022 to the Director General,

Defence Estate Office, Delhi - respondent No.2;

(xi) The Defence Estate Office, Delhi - respondent No.2,

by communication dated 26.5.2022, rejected the

petitioner's application for extension of lease on the

ground that petitioner's lease has been determined

vide termination order dated 25.6.2021.

12. At the outset, it requires to be noticed that by notice dated

25.6.2021, an order of termination determining the lease came

to be passed. As to whether such determination is permissible

or not cannot be in the realm of consideration in a writ

proceedings. Questioning the same writ applicant had preferred

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

the Special Civil Application No.9772 of 2021 under Article 226

of the Constitution of India by assailing the same before the

learned Single Judge on the premise that extant policy of

10.3.2017 provided for extension of lease even if they were to

be in breach by condoning such breach. The lease came to be

terminated for violation of terms of the lease. As to whether

reasons assigned in the termination notice dated 25.6.2021 and

rebutted by the petitioner could not have been the subject-

matter of adjudication in a proceeding under Article 226 of the

Constitution of India. These aspects necessarily have to be

thrashed out in an appropriate proceeding and as such learned

Single Judge has rightly held that petition itself was not

maintainable for the prayer for quashing of the termination

notice dated 25.6.2021. Said finding recorded by the learned

Single Judge does not suffer from any infirmity whatsoever.

13. The writ applicant has placed heavy reliance on the policy

dated 10.3.2017 which was extended from time to time to

buttress its argument namely its right to seek for renewal of

lease as a ground to substantiate the proceedings initiated by it

under Article 226 of the Constitution of India as on the date on

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

which the termination of lease came to be passed determining

the lease, i.e. on 25.6.2021, the lease had not been extended or

in other words, after 1992, lease of the petitioner had not been

extended. In fact, as on the date of termination of lease, 89

years had been completed. In fact, the said policy itself would

indicate that 'extension of lease terms to 31.12.2018 will not

regularize breach of lease conditions'. In other words, if there is

a breach, applicant would not get right to seek for extension. In

the instant case, on one hand, the lessor is contending that the

policy stipulates for condonation of breaches and in other

words, the lessee is contending that the reason assigned in the

order of termination of lease alleging breach has not taken

place. This itself is a disputed question of fact which could not

be gone into in a proceeding under Article 226 of the

Constitution of India. The Hon'ble Apex Court in the case of

Orissa Industrial Infrastructure Development Corporation

vs. Mesco Kalinga Steel Limited and others [(2017) 5 SCC

86] has held:

"22. In the light of aforesaid decision, when we consider the overall conduct of Mesco in the instant case, we are fully satisfied that the High Court has adventured into an avoidable illegality while directing execution of lease deed. It is a settled law that equity follows the rule of common law in

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

respect of such contracts. Renewal of lease is a privilege and if a tenant wishes to claim the privilege, he must do so strictly within the time limited for the purpose. This Court has further considered the question where there is no time limit, an application may be made within a reasonable time. If delay is on the part of lessee for renewal arising out of mere neglect on his part and which could have been avoided by reasonable diligence, would not entitle him to claim renewal.

Applying the same principle to the instant case, it is apparent that the conduct of Mesco was unfair and unpardonable. The conduct disentitled it from indulgence by Court in any manner. We are constrained to observe that a number of times the High Court had unnecessarily directed the matter to be reconsidered and on each and every occasion there was rejection of the representation by the concerned authorities. Thus, no equitable consideration was available with Mesco to invoke the writ jurisdiction for the reliefs sought. Relief granted is not permissible as per law.

19. Mesco had no enforceable right for grant of any relief by mere handing over of possession. The question came up before this Court in Khela Banerjee & Anr. v. City Montessori School & Ors. (2012) 7 SCC 261 when bid was cancelled and was not accepted but the Manager of the respondent convinced the Governor to pass individual order of possession and acceptance of the balance amount in ten six-monthly instalments; thereafter instalments were not paid. This Court held that no enforceable right accrued in favour of the respondent notwithstanding the execution of the agreement dated 12.1.1996 and the offer made by the respondent to make the payment of the balance price was rightly rejected. This Court has held thus:

"29. The first question which merits consideration is whether the conclusion recorded by the High Court on the issue of enforceability of the agreement dated 12-1-1996 is correct and Respondent 1's prayer for issue of a direction to LDA to accept the balance price was rightly rejected. It is an admitted position that in response to tender notice dated 20- 12- 1994, Respondent 1 gave bids for four plots including Plot No. 92-A/C and paid 25% of the price offered by it but did not pay the balance amount necessitating cancellation of the bid, about which intimation was given vide letter dated 14-6-1995.

Respondent 1 did not challenge the cancellation of bids by availing appropriate legal remedy but its Manager succeeded in convincing the Governor of

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

the State to pass an unusual order for handing over possession of the plots and acceptance of the balance amount in six-monthly instalments. The reasons which prompted the Governor to act in violation of the Rules of Business and ordain restoration of the plots in favour of Respondent 1 albeit without setting aside the decision of LDA to cancel the bids are not borne out from the records produced before this Court. Therefore, we hold that the order passed by the Governor and the consequential actions taken by the State Government and LDA including the execution of agreement dated 12-1-1996 did not create an enforceable right in favour of Respondent 1 and the High Court rightly declined to issue a mandamus to LDA to accept the offer made on its behalf for payment of the balance price.

30. It is significant to note that the agreement dated 12-1-1996 contained an unequivocal stipulation that if Respondent 1 fails to pay the instalments of balance price within the prescribed time-limit then the agreement would become void and LDA will be free to sell the plot to any other person. Admittedly, Respondent 1 did not pay the instalments of balance price. Therefore, the agreement stood automatically terminated and LDA became entitled to dispose of the plot by adopting an appropriate mechanism consistent with the doctrine of equality enshrined in Article 14 of the Constitution. It is rather intriguing as to why the functionaries of LDA remained silent for more than 13 years and did not repossess the plot in question. This was perhaps due to the pressure brought by the Manager of Respondent 1 from different quarters, administrative as well as political.

xxx xxx xxx

32. We have carefully gone through the provisions of the 2009 Act and find that they do not even remotely deal with the issue of allotment of land to the educational institutions. Therefore, the Division Bench of the High Court was not at all justified in ordering transfer of the plot to Respondent 1 and that too by ignoring its own finding that the said respondent was a ranked defaulter and the writ petition was filed after a time gap of 13 years without any tangible explanation." (emphasis added by us)

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

14. In the aforesaid circumstances, we are of the considered

view that order passed by the learned Single Judge does not

suffer from any infirmity calling for our interference. In the

instant case, respondent No.2 having determined the lease has

proceeded to issue notice on 4.8.2021 under Section 4 of the

Public Premises (Eviction of Unauthorised Occupants) Act,

1971, which is also sought to be challenged in the writ

proceedings. It is needless to state that while proceeding under

this section, Estate Officer is required to hold an inquiry by

following the principles of natural justice and occupants /

tenants would have a right to present and defend their case and

of being heard. An order passed under this Act is susceptible to

be challenged by filing an appeal under Section 9 by an

aggrieved party as prescribed thereunder. It is this order which

is passed by appellate authority which attains finality as

indicated under Section 10 would be susceptible for judicial

review under Article 227 of the Constitution of India. This

alternate remedy available to a tenant / occupant is sufficient

for the writ court to refrain itself from exercising the

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

extraordinary power to quash the notice if sought for on any

ground whatsoever. The rule of exclusion of writ jurisdiction by

virtue of availability of an alternate remedy is a rule of

discretion and not one of compulsion. In an appropriate case, in

spite of availability of the alternative remedy, this Court would

still exercise its writ jurisdiction in four contingencies:

(i) where the writ petition seeks enforcement of any of the fundamental rights;

(ii) where there is failure of principles of natural justice;

or

(iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged;

(iv) where the arbitrariness is writ large.

15. In the instant case, though a valiant attempt has been

made by Mr. Mihir Joshi, learned Senior Advocate to contend

that order terminating the tenancy was not preceded by

affording opportunity to petitioner requires to be considered for

the purpose of outright rejection inasmuch as an order

determining the lease terminating the tenancy does not

required to be preceded by any hearing or opportunity being

C/LPA/29/2023 JUDGMENT DATED: 17/01/2023

extended to lessee. As such, the contention of Mr. Mihir Joshi,

learned Senior Advocate that impugned order dated 25.6.2021

terminating the lease is in violation of principles of natural

justice, requires to be rejected and we do so. The rule of

exclusion has been dealt with by Hon'ble Apex Court in the case

of Harbanslal Sahnia and Another vs. Indian Oil

Corporation Limited and Others [(2003) 2 SCC 107 and

held that if the contingency as prescribed in the judgment of the

Apex Court in the matter of Whirlpool Corporation vs.

Registrar of Trade Marks [(1998) 8 SCC 1], is attracted,

then only exercise of jurisdiction under Article 226 would be

warranted. However, in the instant case, we do not find any

such contingency arising for this Court to interfere with the

well-reasoned finding recorded by learned Single Judge. As

such, reserving liberty to the appellant to urge all grounds by

replying to the notices dated 4.8.2021 and 18.10.2022 without

expressing any opinion on merits as it is likely to prejudice the

right of the writ applicant, we dismiss this appeal as being

devoid of merits by affirming the judgment dated 21.11.2022

passed by the learned Single Judge in Special Civil Application

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No.9772 of 2021.

16. No order as to costs.

(ARAVIND KUMAR,CJ)

(ASHUTOSH SHASTRI, J) FURTHER ORDER

At this juncture, learned advocate appearing for the

appellant has sought for extension of interim order granted by

the learned Single Judge after pronouncement of judgment by

extending interim relief granted earlier on 26.08.2021 upto

17.01.2023. We find said prayer or request is untenable and

staying the operation of judgment would in no manner affect the

right of the appellant in prosecuting the proceedings before the

Defence Estates Officer / competent authority who may be

nominated by respondent No.1 to adjudicate the proceedings

under Section 4 of the Public Premises (Eviction of

Unauthorised Occupants) Act, 1971. Even if an order adverse to

the interest of appellant is passed by the Defence Estates

Officer / competent authority, the appellant would have a right

of appeal under Section 9 as has already been observed by us

hereinabove and as such, by not staying our judgment passed

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today, we are of the considered view that no hardship much less

inconvenience would be caused to the appellant and appellant

would only be required to appear before the competent

authority and conduct the proceedings which would be subject

to further orders if any, from the higher forum. As such, we

decline to grant the relief sought for by the learned advocate

appearing for the appellant.

(ARAVIND KUMAR,CJ)

(ASHUTOSH SHASTRI, J) Bharat