Jharkhand High Court

Kumar Gowardhan Prasad Singh vs The State Of Jharkhand on 7 May, 2024

Author: Anil Kumar Choudhary

Bench: Anil Kumar Choudhary

        IN THE HIGH COURT OF JHARKHAND AT RANCHI
                   W.P. (C) No. 6055 of 2018

        1. Kumar Gowardhan Prasad Singh, aged about 68 years,
        2. Kumar Gangadhar Prasad Singh, aged about 66 years,
        3. Kumar Girishankar Prasad Singh, aged about 60 years,
        4. Kumar Girinath Singh, aged about 55 years,
        5. Giridhar Singh, aged about 52 years,
        All sons of Late Yuvraj Girendra Narayan Singh and residents of
        Chhouh Muhan Chowk, Ranka Bangla, Zila School Road, Daltonganj,
        P.O. -G.P.O., P.S. -Town, District -Palamau.
                                            ....                     Petitioners
                                        Versus
        1. The State of Jharkhand, represented through Chief Secretary, Govt.
        of Jharkhand, at Ranchi, At -Project Building, Dhurwa, P.O. & P.S. -
        Dhurwa, District -Ranchi.
        2. The Chief Secretary, Govt of Jharkhand, At -Project Building,
        Dhurwa, P.O. & P.S. -Dhurwa, District -Ranchi.
        3. The Special Secretary to the Government, Government of
        Jharkhand, At Project Building, Dhurwa, P.O. & P.S. -Dhurwa, District
        -Ranchi.
        4. The Secretary, Lands Reforms & Revenue Department, Govt. of
        Jharkhand, At -Project Building, Dhurwa, P.O. & P.S. -Dhurwa,
        District -Ranchi.
        5. The Commissioner, Palamau Division, P.O. and P.S. -Medininagar,
        District -Palamau.
        6. The Deputy Commissioner, Palamau, P.O. & P.S. -Medininagar,
        District -Palamau.
        7. The Khas Mahal Officer, Palamau, P.O. & P.S. -Medininagar,
        District -Palamau.                  ....                Respondents
                               PRESENT

          HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
                                .....

For the Petitioner : Mr. Rajeev Ranjan Tiwary, Advocate For the Respondents : Mr. Mithilesh Singh, GA-IV .....

By the Court:-

1. Heard the parties.

2. This Writ Petition has been filed under Article 226 of the

Constitution of India with several prayers but the learned counsel

for the petitioners at the outset submits that the petitioners

abandons all other prayers and confines their prayer to the prayer

no.(v) i.e. to hold and declare that the Government Resolution

dated 15.04.2011, 21.03.2016, 03.01.2017 and 11.01.2018, the copies

of which have been kept at annexure -5, 6, 7 & 8 respectively have

got prospective application and the same cannot be applied

retrospectively to the lease already executed under Khas Mahal

Manual, 1953 and the conditions stipulated therein.

3. The brief facts of the case is that the petitioner purchased land in

the year 1902 and out of the said land, an area of 0.67 acres has

been settled and Khas Mahal Town Lease was executed in the

year 1945 in favour of the father of the petitioners. The said lease

was executed for a period of 30 years. Before expiry of the said

lease, the mother of the petitioners filed application for renewal of

the lease and Misc. Case No. 123/1973-74 was instituted.

4. It is submitted by the learned counsel for the petitioners that

lease was fixed for a period of normally 30 years with condition in

shape of a specific Clause of unlimited renewal of lease, at the

interval of every 30 years on the express condition that the

Government has full right to increase the rate of rent not

exceeding double the amount of the previous rent at every

intervals. In year, 2011 the State Government came up with a

resolution dated 15.04.2011 wherein the Government has taken a

decision to amend the provisions of Khas Mahal Manual, 1953

and also the terms of contract provided for realization of Salami at

the time of renewal of lease as well as for enhancement of rent

contrary to the provisions of the previous contract. It is then

submitted that vide another resolution dated 21.03.2016,

resolution dated 15.04.2011 has been modified and further certain

conditions were imposed which provided for realization of Salami

as well as for fixation of rent on the basis of market price. The

Respondent-State next issued Resolution vide Memo No. 44 dated

03.01.2017 whereby the conditions have again been changed and

further conditions were imposed with regard to the renewal of the

lease wherein it has been provided that for commercial purpose,

5% of the market value will be realized for rent and 10 months of

the rent will be realized as Salami and further for residential

purposes the rent will be fixed as 2% of the market rate and the

Salami would be realized 10 times the rent fixed which is contrary

to the provisions of the Khas Mahal Manual, 1953. It is then

submitted that the respondents have issued another resolution

vide Memo No. 154 dated 11.01.2018 whereby the earlier

resolution was again modified and it has been decided to renew

the residential lease after taking 5% of current market value of the

land as Salami and further renewal of the commercial lease, 10%

of the market value. It is then submitted that it is a settled

principle of law as has been held by the Hon'ble Apex Court that

renewal of lease under the Khas Mahal Manual is almost

automatic and the State is bound to renew and any deviation

therefrom is wholly arbitrary, unjust & unsustainable in the eye of

law.

5. Relying upon the Judgment of Hon'ble Patna High Court in the

case of Khas Mahal Citizen Welfare Society Vs. The State of

Bihar through the Principal Secretary, Department of Revenue

and Land Reforms & Ors., reported in 2016 (1) PLJR 277 wherein

the petitioner in that case challenged the 2011 policy of the

Government of Bihar, which related to renewal of lease and

provided that the same would be upon payment of 5% of the

market value of the property by way of Salami, the learned Single

Judge of the Hon'ble Patna High Court considered the settled

principle of law that it is only where all the parties to contract

unanimously agree to a substitution or modification in the

covenants/terms and conditions of the contract that it can be

carried out and no act of novation, rescission or alteration of a

contract can be done unilaterally at the instance of a single party

to the contract. And as in the said 2011 policy of the Bihar

Government, the State Government as a lessor being in position to

exert pressure on the lessees to kneel down at their dictates, it was

observed that the Government is not clothed with any special

power to act arbitrarily and dehors the lawful procedure. Thus, a

policy decision normally is adopted by a State to effectuate

welfare measures and thus has to withstand the test of

arbitrariness and is to be in conformity with the constitutional

safeguards. The Hon'ble Patna High Court in that case also

relied upon the Judgment of Hon'ble Supreme Court of India in

the case of Sime Darby Engineering SDN. BHD. Vs. Engineers

India Limited, reported in (2009) 7 SCC 545, in paragraph no.28

of which, the Hon'ble Supreme Court of India has held that any

policy decision cannot change the contractual clause more

particularly where the policy decision has come into effect

subsequent to the contract and it was held that since the policy

decision came into effect in that case in 2005 whereas the contract

involved in that case, was entered in the year 2004, hence the

Hon'ble Supreme Court of India in that case held that the policy

decision could not in any way override the contract conditions

entered into between the parties. The Hon'ble Patna High Court

also relied upon the Judgment of Hon'ble Supreme Court of India

in the case of Citi Bank N.A. Vs. Standard Chartered Bank,

reported in (2004) 1 SCC 12, in paragraph no.47 of which, it has

been held by the Hon'ble Supreme Court of India in that case that

any novation, rescission or alteration of a contract under Section

62 of the Indian Contract Act can only be done with the agreement

of both the parties to a contract and cannot be done unilaterally

and the Hon'ble Patna High Court went on to hold that the legal

position being well settled, hence the 2011 policy of the Bihar State

cannot be made applicable to the lease(s) entered in between the

parties prior thereto nor such policy can be given a retrospective

effect and went on to hold that the 2011 policy cannot be made

applicable to pre-existing lease(s) entered into between the State

as a lessor and the individual/juristic person on the other hand as

a lessee and the right of the parties under such lease(s) would

continue to be governed by the provisions of the Khas Mahal

Manual.

6. A Letters Patent Appeal was preferred by the Respondent-State

of Bihar vide L.P.A. No. 979 of 2016 against the said Judgment of

the learned Single Judge and vide Judgment dated 19.07.2017, the

said L.P.A. was dismissed. The State of Bihar filed Special Leave

to Appeal (Civil) No. 12470 of 2018 and the Hon'ble Supreme

Court of India vide its order dated 18.02.2019 upheld the order of

the Division Bench of the Hon'ble Patna High Court in the Letters

Patent Appeal No. 979 of 2016 dated 19.07.2017 but made it clear

that the order of High Court with regard to the prospectivity of

the 2011 policy will be subject to the terms and conditions of each

individual lease. Further in case of alleged violation of the terms

of the lease, each case would be examined on its own facts, with

reference to the stipulation in the lease, date of violation, etc. to

decide whether or not 2011 policy would apply. Hence, it is

submitted by the learned counsel for the petitioners that the only

prayer confined by the writ petitioners be allowed.

7. The learned counsel for the Respondent-State on the other hand

relying upon the Judgment of Hon'ble Supreme Court of India in

the case of Federation Haj PTOs of India vs. Union of India

reported in (2020) 18 SCC 527 submits that para -18 thereof

reiterated the settled principle of law that policy decision of the

executives are best left to it and a court cannot be propelled into

the unchartered ocean of government policy, as has been held by

the Hon'ble Supreme Court of India in the case of Bennett

Coleman & Co. Vs. Union of India, reported in (1972) 2 SCC 788

and also referred to the well accepted principle that in complex

social, economic and commercial matters, decisions have to be

taken by the government authorities keeping in view several

factors and it is not possible for the courts to consider competing

claims and to conclude which way the balance tilts as the courts

are ill-equipped to substitute their decisions. Hence, it is not

within the realm of the courts to go into the issue as to whether

there could have been a better policy and on that parameters

direct the executive to formulate, change, vary and/or modify the

policy which appears better to the court. It is next submitted by

the learned counsel for the Respondent-State that the resolution

are quite worthy of application to the lease to be renewed already

executed prior to Khas Mahal Manual and none of the aforesaid

annexures is at all unjust, arbitrary and unsustainable in the eyes

of law and Government is quite competent to formulate new

policy from time to time as market value of its land under lease

increases many time higher within 30 years of its earlier lease(s)

whereas value of money considerably decreases. Hence, it is

submitted that this writ petition being without any merit be

dismissed.

8. Having heard the submissions made at the Bar and after going

through the materials in the record, the only question that crops

up for consideration is that 'whether the Resolutions of the

Government vis-à-vis their applicability to the terms and

conditions of the lease entered into by the Government or its

predecessor in interest with the petitioner or their predecessor in

interest can have retrospective effect.

9. The settled principle of law as has been held by the Hon'ble

Supreme Court of India in para-28 of Sime Darby Engineering

SDN. BHD. Vs. Engineers India Limited (supra) and para -47 of

Citi Bank N.A. Vs. Standard Chartered Bank (supra), as already

referred to above in the foregoing paragraphs of this judgment,

this Court has no hesitation in holding that the law is well settled

that a policy cannot change the contractual clause more

particularly when the policy decision has come into effect,

subsequent to the contract and any novation, rescission or

alteration of a contract can only be done with the agreement of

both the parties to a contract and cannot be done unilaterally.

10. Now coming to the facts of the case, no doubt if it is held that the

four resolutions which has been already discussed in detail in the

foregoing paragraphs of this Judgment and kept at annexure-5, 6,

7 & 8 of this writ application, allowed to have retrospective effect,

then the same will result in unilateral novation, rescission or

alteration of the terms of the contract in the shape of lease deed.

At the same will be in the teeth of the principle of law settled in

the said cases to the contrary as well as to the ratio of the case of

The State of Bihar & Ors. Vs. Khas Mahal Citizen Welfare

Society in S.L.P(C) No. 12470 of 2018 dated 18.02.2019,. Thus, this

Court has no hesitation in holding that the answer to the question

framed is in the negative and the said four resolutions, the copy of

which has been kept at annexure -5, 6, 7 & 8 of this writ petition

cannot have any retrospective effect; in the absence of the consent

of the parties to the lease; as it being the settled principle of law

that, the terms and conditions of lease, can only be changed with

consent of both the parties and not unilaterally by the

government. Hence, the prayer of the petitioners to hold and