Rajasthan High Court - Jodhpur
State Of Raj. And Ors vs M/S.Shakti Trading Company on 6 November, 2025
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
[2025:RJ-JD:47315-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Spl. Appl. Writ No. 326/2010
State Of Raj. And Ors
----Appellant
Versus
Bhai Shankar Lal Jawan Mal
----Respondent
Connected With
D.B. Spl. Appl. Writ No. 329/2010
State Of Raj. And Ors
----Appellant
Versus
M/s.shakti Trading Company
----Respondent
D.B. Spl. Appl. Writ No. 341/2010
State Of Raj. And Ors
----Appellant
Versus
M/s. Satya Narain Ankit Kumar
----Respondent
D.B. Spl. Appl. Writ No. 344/2010
State Of Raj. And Ors
----Appellant
Versus
M/s. Shailesh Trading Company
----Respondent
D.B. Spl. Appl. Writ No. 439/2010
State Of Raj. And Ors
----Appellant
Versus
M/s. Ratan Trading Company
----Respondent
For Appellant(s) : Mr. L.K. Purohit
For Respondent(s) : ----
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HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE SANDEEP TANEJA
Judgment
Reserved on 06/08/2025
Pronounced on 06/11/2025
Per Dr. Pushpendra Singh Bhati, J:
1. These batch of special appeals arise out of a common
judgment and order dated 08.10.2009 passed by the learned
Single Judge of this Hon'ble Court S.B. Civil Writ Petition No.
3801/1998 (Bhai Shankar Lal Jawan Mal v. State of Rajasthan &
Ors.) and other connected writ petitions, whereby the writ
petitions were allowed. Since all these appeals involve identical
facts and issues, they were heard together and are being decided
by this common judgment for thse sake of convenience and
clarity. The facts of D.B. Special Appeal (Writ) No. 326/2010
(State of Rajasthan & Ors. v. Bhai Shankar Lal Jawan Mal) are
being treated as the lead case for reference.
2. The D.B. Special Appeal (Writ) No. 326/2010 (State of
Rajasthan & Ors. v. Bhai Shankar Lal Jawan Mal) has been
preferred seeking the following reliefs:
"It is, therefore, most respectfully prayed that this
appeal may kindly be allowed and the order dtd.8.10.2009
passed by the learned Single Judge be set aside and the writ
petition filed by the respondent be ordered to be dismissed.
Any other appropriate order or direction which may be
deemed just and proper just and proper in the facts and
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circumstances of the case may be passed in favour of the
appellants."
3. The brief facts giving rise to the present batch of appeals are
that the Krishi Upaj Mandi Samiti, Sumerpur issued an
advertisement dated 18.09.1995 inviting bids for auction of plots
situated in the Market Yard, Sumerpur, on lease for a period of 99
years. The respondent-writ petitioner participated in the auction
held on 29.09.1995 after depositing earnest money of ₹10,000/-,
and being the highest bidder, was allotted a shop/plot. The bid
was approved by the Director, Agriculture Marketing, subject to
the condition that the allottees shall furnish an undertaking to
execute the lease deed in accordance with the terms and
conditions approved by the State Government and to get the same
registered. In compliance, the respondent submitted the
undertaking, the possession of the plot was handed over, and
construction was made thereon.
3.1. Subsequently, vide communication dated 21.07.1998, the
respondent was directed to execute the lease deed in the
proforma approved by the State Government, which incorporated
a new condition for payment of annual lease money equivalent to
5% of the market value of the plot at the time of allotment, with a
further condition for increase of such lease money by 25% after
every fifteen years. Aggrieved by the imposition of this additional
monetary obligation, the respondent filed a writ petition
challenging the said communication.
3.2. The learned Single Judge, upon consideration of the record
and rival submissions, found that the terms and conditions of the
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auction notice dated 18.09.1995 issued by the Krishi Upaj Mandi
Samiti, Sumerpur, did not contain any stipulation requiring
payment of annual lease money. It was held that the auction
conditions were exhaustive and that no such recurring liability was
contemplated at the time of auction. The subsequent
communication dated 21.07.1998, directing execution of lease
deeds as per the proforma approved by the State Government and
incorporating a condition for payment of annual lease rent at 5%
of the market value with a 25% enhancement every fifteen years,
was held to be a unilateral imposition of additional pecuniary
liability beyond the terms originally notified. The Court observed
that the allottees, having already acted upon the auction terms
and completed construction on the allotted plots, could not be
compelled to bear new financial burdens, and the principle of
promissory estoppel stood attracted.
3.3. Further, relying upon Section 105 of the Transfer of Property
Act, 1882, the learned Single Judge held that payment of monthly
or annual rent is not an essential ingredient of a lease, as transfer
of leasehold rights can validly be made on payment of a one-time
premium. It was, therefore, concluded that once the leasehold
plots were auctioned on payment of premium, the respondents
had no authority to levy additional annual rent. Consequently, the
condition incorporated in the proforma lease deed regarding
payment and enhancement of annual lease money was declared
illegal and unsustainable, and the respondents were directed to
execute the lease deeds after deleting the said condition.
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4. Mr. L.K. Purohit, learned counsel for the appellants submitted
that the order dated 08.10.2009 passed by the learned Single
Judge is contrary to the facts and law applicable to the case and
deserves to be set aside. It was urged that the learned Single
Judge failed to appreciate that the bid of the respondent-writ
petitioner had been accepted subject to explicit conditions
requiring execution of the lease deed in accordance with the terms
and conditions approved by the State Government, and that the
respondent had also furnished a written undertaking to this effect.
Hence, once the respondent voluntarily accepted the terms and
took possession of the plot, he could not subsequently challenge
the validity of the conditions incorporated in the proforma lease
deed.
4.1. Learned counsel further submitted that the learned Single
Judge erred in holding that the condition relating to payment of
annual lease money equivalent to 5% of the market value was
illegal. It was argued that the said condition was neither arbitrary
nor extraneous, but was introduced uniformly under the policy
approved by the State Government for all Krishi Upaj Mandi
Samitis. Having derived benefit of the allotment, the respondent
stood estopped from disputing the terms of the lease, and the
learned Single Judge failed to consider this aspect in its correct
perspective.
4.2. Learned counsel for the appellants also contended that as
per Condition No. 5 of the auction notice, the allottees were
required to execute the lease deed in the prescribed proforma on
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requisite non-judicial stamp paper, and thus the incorporation of
the clause regarding payment of annual lease money in the State-
approved proforma could not be faulted. The condition was part of
the standardized lease structure applicable to all market yard
allotments and was binding on the allottees.
4.3. It was further submitted that the learned Single Judge
overlooked the fact that the Mandi Samiti had earlier been
allotting only constructed shops on rental basis, and that the
terms for allotment of plots on leasehold basis were still under
consideration at the time of auction. Therefore, when the
conditions were subsequently finalized and approved by the State
Government, incorporation of the clause relating to annual lease
money and its enhancement every fifteen years was a legitimate
administrative action and not arbitrary in any manner.
4.4. Lastly, learned counsel urged that the learned Single Judge
misapplied the provisions of Section 105 of the Transfer of
Property Act, 1882, by treating payment of rent as impermissible
in a lease of immovable property. It was submitted that while
Section 105 does not make rent a mandatory ingredient, it equally
does not prohibit imposition of annual or monthly rent as part of
lease consideration. Therefore, the finding that inclusion of annual
lease money was contrary to law is legally unsustainable.
5. It is to be noted that none appeared on behalf of the
respondent-writ petitioner at the time of hearing of these appeals.
However, for the purpose of adjudication, the stand taken by the
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respondent-writ petitioner in the writ proceedings has been taken
into consideration.
15. The stand of the respondent-writ petitioner before the
learned Single Judge was that the terms and conditions of the
auction notice dated 18.09.1995 issued by the Krishi Upaj Mandi
Samiti, Sumerpur, were exhaustive and did not contemplate any
liability towards payment of annual lease money. It was urged that
the respondents-authorities could not unilaterally impose an
additional pecuniary burden after completion of the auction and
allotment of plots. The writ petitioner contended that the
communication dated 21.07.1998, requiring execution of lease
deeds as per the State Government-approved proforma
incorporating a condition for annual lease rent at 5% of the
market value with 25% enhancement every fifteen years, was
wholly arbitrary and dehors the original terms of the auction. It
was further submitted that the petitioners, having altered their
position and invested substantial amounts in construction of shops
based on the initial auction terms, were entitled to the protection
of the doctrine of promissory estoppel, and that the authorities
were estopped from enforcing new or onerous conditions not
forming part of the original auction notice.
6. Heard learned counsel for the appellant and perused the
material available on record.
6.1. This Court observes that the central issue involved in these
appeals pertains to the validity of the condition incorporated in the
lease deed proforma approved by the State Government, requiring
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the allottees to pay annual lease money equivalent to 5% of the
market value of the plot, with a 25% enhancement every fifteen
years, which condition was introduced after the completion of the
auction process. The material on record makes it evident that the
auction notice dated 18.09.1995, issued by the Krishi Upaj Mandi
Samiti, Sumerpur, did not contain any clause stipulating payment
of annual lease rent or any recurring charge. The auction
conditions were detailed and exhaustive, specifying the earnest
money deposit, bid amount, and other incidental liabilities, but
were silent on any further periodic payments.
6.2. This Court further finds that after the completion of the
auction, the bids were duly approved by the Director, Agriculture
Marketing, and the possession of the allotted plots was handed
over to the allottees, who also constructed shops and commenced
business thereon. The subsequent communication dated
21.07.1998, issued nearly three years later, requiring execution of
lease deeds in the new proforma containing the impugned clause,
clearly sought to impose an additional pecuniary burden beyond
the contractual terms initially accepted. Such unilateral alteration
of the conditions after finalization of the auction is impermissible
in law and contrary to the settled principles governing public
contracts.
6.3. This Court also finds that the undertaking furnished by the
allottees to execute lease deeds in accordance with the terms
approved by the State Government cannot be construed as an
unqualified consent to bear any subsequent financial burden not
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contemplated at the time of auction. The said undertakings were
given under circumstances leaving the allottees with no viable
option but to comply, failing which they would have forfeited their
plots. Therefore, no estoppel can be invoked against them to
validate an otherwise arbitrary condition.
6.4. This Court further observes that the reasoning of the learned
Single Judge, based on Section 105 of the Transfer of Property
Act, 1882, is sound and well-founded. The said provision makes it
clear that payment of monthly or annual rent is not a necessary
component of a valid lease, and leasehold rights can be
transferred upon payment of a one-time premium. Once the
auction was conducted and the full bid amount was realized, the
transfer stood complete, and no further liability could be imposed
retrospectively in the guise of rent.
6.5. This Court is of the considered opinion that the learned
Single Judge correctly applied the principle of promissory
estoppel, holding that the respondents, having induced the
petitioners to act upon the terms of the auction, could not
thereafter alter the financial obligations to their detriment. The
introduction of the annual lease rent condition was not only
contrary to the auction notice but also unreasonable, unfair, and
arbitrary, and therefore rightly quashed.
6.6. In view of the foregoing discussion, this Court finds no
infirmity or illegality in the judgment dated 08.10.2009 passed by
the learned Single Judge warranting interference in appellate
jurisdiction. The findings are based on a correct appreciation of
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facts and settled legal principles, and the impugned order does not
suffer from any perversity or error apparent on the face of the
record.
7. Accordingly, all the Special Appeals (Writ) filed by the State of
Rajasthan and its functionaries are dismissed being devoid of
merit. The judgment and order dated 08.10.2009 passed by the
learned Single Judge in S.B. Civil Writ Petition No. 3801/1998
(Bhai Shankar Lal Jawan Mal v. State of Rajasthan & Ors.) and
other connected matters are affirmed.
(SANDEEP TANEJA),J (DR.PUSHPENDRA SINGH BHATI),J
3-SKant/-
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