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TMI Blog2015 (11) TMI 1718X X X X Extracts X X X X X X X X Extracts X X X X ..... writ, order or direction in the nature of certiorari quashing the impugned show cause notice dated 19.12.1998 contained in Annexure '6' to this writ petition. b) issue a writ, order or direction in the nature of prohibition restraining the Respondents from canceling the lease with regard to property No. 19, Clive Road, Allahabad. c) issue a writ, order or direction in the nature of prohibition restraining the Respondents from converting the lease of property No. 19, Clive Road, Allahabad, into free hold in favour of any other person. d) issue a writ, order or direction in the nature of mandamus directing the Respondents Nos. 1 to 4 to accept the application and money for conversion of lease hold rights with regard to property No. 19, Clive Road, Allahabad, into free hold, as per Government order dated 4.12.1998, contained in Annexure '7' to this writ petition in favour of the Petitioner bank. e) issue a writ, order or direction in the nature of mandamus directing Respondents Nos. 1 to 4 to renew the lease in respect of the premises No. 19, Clive Road, Allahabad, and to execute the necessary lease deed with reference to the decretal rights of the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the capacity of mortgagee of the various properties of the said Company including 19, Clive Road, (25 and 25-A Chikatpur Nasibpur Bakhtiyara), Allahabad, which was held by the said Company as lessee. The said suit was decreed on 09.10.1991 and a mortgage decree was passed in favour of Bank. It would be relevant to mention here that the paramount title holder namely the State of Uttar Pradesh was not made party in the suit and the mortgage decree was passed on the basis of settlement arrived at between the parties. 6. Some of the important terms of the settlement upon which the Bank's suit was decreed, inter alia, are as follows: "(a) There will be a decree for Rs. 10,84,34,870.37 in favour of the Plaintiff and against the Defendant Nos. 1, 2, 3 and 7. (b) There will be a decree for interest on the decretal due of Rs. 10,84,34,870.37 at 6% per annum simple from August 21, 1991 till realisation of the decretal dues and in terms of Clause 17 herein below. (c) There will be a decree for costs assessed at Rs. 2,31,442.08. Such costs shall be paid on or before December 31, 1991. (d) There will be a decree for Rs. 33,30,000/- of the Plaintiff against Defendant No. 8 with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property situated at 19, Clive Road may be converted into free hold. The Bank as a mortgagee decree holder and as a nominee of the lessee Company subsequently submitted an application along with relevant challans in respect of part-payment of free hold charges depositing a sum of Rs. 21,85,200.00 on 15.06.1999 in the State Bank of India, Allahabad Main Branch. Moreover, in paragraphs 14, 16 and 22 of the counter affidavit filed by the Company in Writ Petition No. 775/99, it has been admitted that the Appellant Bank is their nominee. 8. Curiously enough, when the terms of the mortgage decree was not complied with inasmuch as the decretal amount was not paid to the Bank by the mortgagor-ABP Company, the Bank filed an application in the Calcutta High Court for transfer of execution applications to the Debt Recovery Tribunal for issuance of recovery certificates. Upon such transfer the cases were registered before the Debt Recovery Tribunal, Calcutta. 9. Surprisingly enough, before the DRT, Calcutta, a settlement was entered into between the parties. Before the DRT, five banks viz., United Bank of India, Allahabad Bank, Bank of Baroda, Canara Bank, Punjab National Bank, were the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay: a) Certified sum Rs. 2,57,61,088.94 against the Defendants. b) Defendants are directed to pay to the applicant interest at the agreed rate from 11.12.1997 till the amount is repaid. c) In default of payment, the Recovery Officer is directed to sell by public auction or private treaty the hypothecated assets of the Respondents including in those mentioned in Annexure X by public auction or private treaty. d) Defendants are directed to pay the cost of the proceedings jointly and severally to the applicant. 4) In TA/18/97 and TA/19/97 this Tribunal has already issued the certificate for recovery in favour of the applicant bank. The Defendants have admitted these certified claims. 5) The parties have agreed to settle the decretal amounts of United Bank of India (T.A. No. 18 of 1997, T.A. No. 19 of 1997), and the claims of the applicant banks in OA No. 192 of 1997, OA No. 193 of 1997 and OA No. 275 of 1997 in the following manner: a) The consortium banks have agreed to settle their respective claims against the Defendants by accepting the following amounts by 30th June, 2004. i) Rs. 2439.65 lakhs by United Bank of India ii) Rs. 304.35 lakhs by Canara Bank. (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made a representation to the State Government on 30.08.2005 under Paragraph 7 of G.O. dated 17.02.1996 merged in G.O. dated 01.12.1998 for passing orders for grant of free hold rights. It was argued by the writ-Petitioner before the High Court that the legal opinion sought by the State Government from its Law Department in the aforesaid matter has also recommended that the said property may be converted into freehold but the District Magistrate, Allahabad did not pay any heed to the aforesaid opinion as well as on the recommendation given by the State Government. Before the High Court, it was pleaded by learned Counsel for prospective auction purchaser Jvine Development Ltd. that after the decree of Calcutta High Court and subsequent order of Debt Recovery Tribunal, Kolkata all the rights, title and interest of M/s. Amrit Bazar Patrika Pvt. Ltd. ceased and it vested with the Bank and the Bank had acquired first charge over the aforesaid property. As per the order of Debt Recovery Tribunal, Kolkata, a sale committee was formed, which started its function by calling bids for the aforesaid property. Accordingly, a sale notice was published on 18.5.2004 in 'The Times of India' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents to convert the land in question as free hold in favour of the Petitioner-Bank. In the result, the writ petition is hereby allowed and the show cause notice dated 19.12.1998 is hereby quashed. The Respondents are hereby directed by the writ of mandamus to issue a demand notice forthwith and convert the land in question into free hold after taking the necessary 75 % balance amount from the Petitioner-bank as per the G.O. dated 1.12.1998. Furthermore, the connected writ petition No. 46115 of 2004 is allowed and the impugned notice dated 30.9.2004 is hereby quashed and the Respondents are directed to transfer the land to the Petitioner company after receipt of remaining balance amount of 75 % as per the terms of the auction. The Land is transferred in the name of the Bank, it is made clear that Respondents shall raise the demand of remaining 75 % as soon as the land is transferred in the name of the bank." 16. Before we proceed to decide the issue involved, it would be appropriate to narrate the following facts which are not in dispute: "i) The property in question i.e., Bungalow No. 19, Clive Road, Allahabad in the State of U.P. was initially given on lease dated 11.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAG for the State of U.P., Mr. Rajesh Kumar, learned Counsel for the Bank, Mr. Rakesh Dwivedi, learned senior Counsel, Mr. V. Shekhar, learned senior Counsel, Mr. Awanish Sinha, Mr. Rishi Kesh, learned Counsel appearing for the Appellants and the Respondents, advanced their arguments. 19. We have gone through the facts of the case and the documents which reveal that in Case No. 510 of 1990 filed by the Appellant-Bank before the Calcutta High Court, the State of U.P. and the Collector were not made parties although the property in question being the Nazul property under the ownership of the State of U.P. Hence, the Appellant had filed a case before the High Court of Calcutta by concealing the facts and as such the order dated 09.10.1991 is not binding upon Respondent Nos. 1, 2 and 3. It has been specifically mentioned in the mortgage decree that the decree will not be binding to persons who are not parties. Extract of the order dated 09.10.91 passed by the Calcutta High Court by which the suit was decreed in terms of the settlement is reproduced hereinbelow: "xxxx The court: the Defendants Nos. 1, 2, 3, 7 and 8 have entered into an agreement with the United 'Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, Edmoston Road. 22. The contention of the Appellant-Bank is that only on the basis of the notice issued on 9.12.1998, the Appellant cannot be deprived of its rights. It is pertinent to mention here that the above notice was not issued to the Appellant Bank, but was issued to the Secretary/Director of M/s. ABP Pvt. Ltd. vide letter No. 56/Nazul-(CL)-XXI-8/11(96-97) dated 19th December, 1998 in relation to the Nazul land No. 25 and 25A, Chikatpur, Nasibpur Bakhtiara. Hence, the Appellant is not competent to file any petition and challenge the above notice. It is worthwhile to mention that the above show cause notice was issued on the ground of violation of the terms of lease for which a reply was filed by Shri B.P. Tiwari, Secretary of M/s. ABP Company Ltd. dated 13.01.1999. This Court vide order dated 8.1.1999 in the writ petition has stayed further proceedings of the above show cause notice issued on 19.12.1998. It is also worthwhile to mention here that in the case of Nazul Land No. 120-1/2 Civil Station (which is situated at 10, Edmoston Road), on violating the terms of lease by raising illegal construction without prior sanction and for other irregularities, a show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court failed to appreciate that after conversion of the properties from the leasehold to freehold, the land in question will fetch more price which will benefit the interest of the Bank and the workers. So many other grounds have also been taken by the Appellant. 26. There is no dispute that the land and building in question is Nazul property being the property of Government maintained by the State authorities in accordance with the Nazul Rules. Chapter 1 of the Nazul Rules lays down the provision for maintenance of Nazul register, procedure for entering names of persons in possession of Nazul land and building. 27. Rule 13 provides the procedure for sale or lease of Nazul land, whereas Rule 16 makes it mandatory for obtaining prior approval of the State Government before sale or lease or renewal of leases of nazul lands. Rule 13, 14 and 16 are quoted herein below: "13. Sale or lease of nazul lands-The sale lease of nazul shall in all cases be carried out under the Collector's orders and when it is proposed to lease or sale nazul, in the occupation of any department, other than the Revenue Department, the nazul shall be transferred to the Collector for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment Grants to take effect according to their tenor-All provisions, restrictions conditions and limitations ever contained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor, any rule of law stature or enactment of the Legislature to the contrary notwithstanding." 29. The aforesaid legal position was known to the ABP Company and also the Bank. In reply to the application filed by the Bank with the authorities of the State of Uttar Pradesh for conversion of the land into free hold land in favour of the Bank, the Authority made it clear that conversion of land cannot be allowed in favour of the Bank. The relevant portion of the Collector's order is extracted hereinbelow: "It is also pertinent to mention here that the lease of Nazul land is sanctioned under the provisions of Government Grants Act, 1895 on which the provisions of Transfer of Property Act, 1882 are not made applicable, as such the act of mortgaging the above property by the management of the M/s. Amrit Bazar Patrika is without any authority and is illegal. Nazul land is a government property, which is fully vested in the Government of Uttar Pradesh. Hence even on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment order in accordance with the rules mentioned in the Rules 13 to 16 of the Nazul Rules read with Form 3 of the Nazul Manual which talks about Renewal of a Lease. 36. In Form 3 of the Nazul Manual it is mentioned in the renewal lease deed that "In pursuance of the premises the lessor hereby demises upto the Lessee all and singular the hereditaments and premises comprised in and demised by the within the written lease, now standing thereon with the same exceptions and reservations as are therein expressed to hold unto the Lease...... and subject to and with the benefit of such and the like lessee's and Lessor's covenants respectively and the like provisions and conditions in all respects (including the proviso for re-entry) as are contained in the within written lease. 37. This "within written lease" is the original lease deed as mentioned in the Form 2 of the Nazul Manual. Form 2 of lease of Nazul land for building purposes it is one of the condition between the lessor and the lessee that " the lessee will not in any way transfer or sublet the demised premises or buildings erected thereon without the previous sanction in writing of the lessor". 38. In the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r activity of the decision-making authority. The expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be a legitimate expectation. Not being a right, it is not enforceable as such. It is a concept fashioned by courts, for judicial review of administrative action. It is procedural in character based on the requirement of a higher degree of fairness in administrative action, as a consequence of the promise made, or practice established. In short, a person can be said to have a 'legitimate expectation' of a particular treatment, if any representation or promise is made by an authority, either expressly or impliedly, or if the regular and consistent past practice of the authority gives room for such expectation in the normal course. As a ground for relief, the efficacy of the doctrine is rather weak as its slot is just above 'fairness in action' but far below 'promissory estoppel'. It may only entitle an expectant: (a) to an opportunity to show cause before the expectation is dashed; or (b) to an explanation as to the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure has enacted a statute. The legitimate expectation should be legitimate, reasonable and valid. For the application of doctrine of legitimate expectation, any representation or promise should be made by an authority. A person unconnected with the authority, who had no previous dealing and who has not entered into any transaction or negotiations with the authority cannot invoke the doctrine of legitimate expectation. A person, who bases his claim on the doctrine of legitimate expectation has to satisfy that he has relied on the said representation and the denial of that expectation has worked to his detriment. This Court in the case of Sethi Auto Service Station and Anr. v. Delhi Development Authority and Ors. (2009) 1 SCC 180, while considering the doctrine observed: "33. It is well settled that the concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. The court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng period of lease which expired in 1987. (iv) As against the loan taken by the Company from the Bank, a mortgage was created in respect of the property by the Company in favour of Bank. The lease in respect of the leasehold interest in the property admittedly expired in 1987. (v) The mortgage so created by the Company in favour of the Bank in respect of Nazul land without the sanction of the State of Uttar Pradesh in terms of the lease, is ab initio void, hence no right was created in favour of the Bank by reason of the said mortgage. (vi) Consequently, a mortgage decree obtained by the Bank on the basis of settlement, in absence of and behind the back of the State of U.P. could not have been enforced against the State. The subsequent proceedings of transferring the decree to the Debt Recovery Tribunal and again passing an order for auction sale of the property on the basis of settlement is wholly illegal and without jurisdiction. (vii) The Appellant Bank has no right, title or interest in the property so as to claim a right of conversion of the property into a freehold property. (viii) The impugned notice issued by the State of U.P. directing resumption of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X
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