TMI Blog2015 (11) TMI 1718X X X X Extracts X X X X X X X X Extracts X X X X ..... sistent predictable and certain conduct, process or 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. The doctrine of legitimate expectation ordinarily would not have any application when the legislature 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. The High Court after having recorded a finding that the Bank being the nominee of the mortgagee has a right to make an application for conversion of Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 bank. f) Issue any other suitable writ, order or direction which this Hon'ble Court may deem just and proper in the circumstances of the case. 4. The facts of the case in brief as narrated in the writ petition are that the property in question i.e. Bungalow No. 19, Clive Road, Allahabad was initially leased out to one Ms. Mortha Anthony on 11.8.1887 for 50 years and the said period expired on 11.8.1937. On 7.4.1945, the lease was renewed in favour of Miss Verna Anthony and Miss Leena Anthony for another 50 years by the Collector Allahabad, for the Governor of United Provinces, which was made effective from 1.9.1937, and as such, the said lease was valid up to 31.8.1987. Subsequently, on 22.10.1945, the lease was transferred in favour of M/s. Amrita Bazar Patrika Pvt. Ltd. (in short, the ABP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for interest on the decretal due of ₹ 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 ₹ 2,31,442.08. Such costs shall be paid on or before December 31, 1991. (d) There will be a decree for ₹ 33,30,000/- of the Plaintiff against Defendant No. 8 with interest at 6% per annum simple from August 21, 1991, till realisation of the decretal dues and in terms of Clause 17 herein. This amount, however, is included in the amount stated in paragraph (a) hereinabove. (e) There will be a declaration that the suit properties mentioned in Annexure K to the plaint, a copy whereof is annexed hereto, remain hypothecated and the immovable properties mentioned in Annexure L to the plaint, a copy whereof is annexed hereto, remain mortgaged to the Plaintiff as securities for the payment of the decretal dues with interest and costs, as provided hereinabove. (f) There will be a decree for sale of the hypothecated assets mentioned in Annexure K to the plaint for payment of the decretal dues. Such sale, however, shall not be effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 applicants and ABP Company (mortgagor) and guarantors were the Respondents. Here also, the State of U.P. was not a party to the debt recovery proceeding. On the basis of consent of the parties the Debt Recovery Tribunal passed an order on 11.02.2004. The relevant portion of the order dated 11.02.2004 passed by the DRT is quoted hereinbelow: Heard the parties and examined the contents of the joint petition and the records filed. The aforesaid cases are disposed of on the basis of the settlement in the following way: 1) By consent of the parties application being O.A. No. 192 of 1997 is disposed of by the issuing certificate and directing the Defendants jointly and severally, to pay: a) ₹ 6,54,221.00 to applicant No. 1 b) ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant 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) ₹ 2439.65 lakhs by United Bank of India ii) ₹ 304.35 lakhs by Canara Bank. (iii) ₹ 303.13 lakhs by Bank of Baroda (iv) ₹ 228.16 by Allahabad Bank (v) ₹ 230.67 lakhs by Punjab National Bank vi) ₹ 57 lakhs towards legal expenses incurred by the consortium banks. 10. Not only that, by the said order a committee consisting of receiver was appointed with a direction to take possession of all hypothecated assets and mortgaged properties and dispose of the same in the following manner: xxxxxx (c) Out of the sale proceeds of hypothecated assets and mortgaged properties as contained in Annexure I II of today's joint petition the commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment. 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' in respect of the immovable properties situated at 19, Clive Road, Allahabad. In reply to this auction sale notice, the writ-Petitioner deposited the earnest money by way of bank draft and also submitted the tender. 14. The State of U.P. for the first time after having come to know about all the aforementioned developments when it was made party in the writ petition, filed a detailed counter affidavit. According to the State of U.P. the suit property is a Nazul Land No. 25 and 25A which was given on lease to ABP and the period of lease expired on 31.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 11.08.1887 to Ms. Mortha Anthony for a period of 50 years commencing from 11.08.1887 ending on 11.08.1937. The said lease was renewed for another term of 50 years on 7.4.1945 by the Government of United Province of Allahabad. The said lease was scheduled to expire on 31.8.1987; ii) Before the expiry of lease the lessee viz., Ms. Mortha Anthony, transferred the leasehold property on 22.10.1945 in favour of Appellant-Amrit Bazar Patrika Private Limited (for short ABP). Consequent upon the transfer the lease deed was executed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh 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 in terms of the settlement which have been signed by the Defendants as also on behalf of the Plaintiff and their respective advocates on record. These Defendants submitted to a decree in favour of the Plaintiff. Under those circumstances this Court as per the terms of settlement agreed upon by and between the parties passes a decree in terms of the settlement filed. However, this decree will not affect the interest of any of the parties other than the parties to the settlement. This Court appo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant 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 notice vide letter No. 448/Nazul-(CL)-XXI-8/51(80-81) dated 14th May, 1999 was sent to the Director/Secretary of M/s. ABP Pvt. Ltd. through registered post and its reply was given by Shri B.P. Tiwari, Secretary, ABP Pvt. Ltd. on 27.5.1999 and in that reply no justified reasons have been given by the Secretary of the above Company for the violation of the terms of the lease by unauthorisedly raising construction and for unauthorisedly running a workshop for repairing LML Vespa Scooter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 lease or sale: Provided that before the nazul in the occupation of a department is transferred to the Collector for disposal it shall be the duty of the department concerned to ascertain whether the nazul in question is required by any other department of Government. 14. Sale or lease of a plot for building purposes shall, subject to provisions of Rule 16, be sanctioned by- (1) the Collector, if the estimated value does not exceed ₹ 2,500; (2) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 mortgaging the said property in question by M/s. Amrit Bazar Patrika without getting prior sanction of its Lessor/Collector, Allahabad, the United Bank of India has no authority to get it converted into free hold in their favour. 30. The lease of Nazul land for building purposes was sanctioned under G.O. No. 2035/IX-150 dated 27th November, 1940 as amended by G.O. No. 1119-IX/54-1952 dated 25th June, 1952. The form of leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten 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 case there was nothing on the record to show that the lessee i.e. (ABP) has obtained any written sanction from the lessor i.e. Government before mortgaging his leasehold interest in the Nazul Land. Meaning thereby the mortgage done by the lessee in favour of the Bank itself is bad in law, which was done in clear violation of the terms of the lease deed i.e. mortgage of the Nazul land without previous sanction i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 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 cause for denial. In appropriate cases, courts may grant a direction requiring the Authority to follow the promised procedure or established practice. A legitimate expectation, even when made out, does not always entitle the expectant to a relief. Public interest, change in policy, conduct of the expectant or any other valid or bonafide reason given by the decision-maker, may be sufficient to negative th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 authority the full range of choice which the legislature is presumed to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout 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 is legal and valid and cannot be quashed at the instance of the Bank. 46. For the reasons aforesaid, Civil Appeal No. 5254 of 2010 is bound to be allowed and the judgment and order passed by the High Court is liable to be set aside. 47. In the result, other appeals filed by the Appellants i.e. Civil Appeal Nos. 1969-1970 of 2010, Civil Appeal No. 4688 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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