SHARAYU D/O ASHOK GOKHALE Vs. NAGPUR MUNICIPAL CORPORATION
HIGH COURT OF BOMBAY (AT: NAGPUR)
Sharayu D/O Ashok Gokhale
NAGPUR MUNICIPAL CORPORATION
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A.S.CHANDURKAR, J. -
(1.) The challenge raised in this writ petition filed under Article 226 of the Constitution of India is to the insertion of fresh terms and conditions while renewing lease of land in a manner contrary to the law laid down by this Court. Further challenge is raised to the demand notice issued by the Estate Officer, Nagpur Municipal Corporation demanding transfer fees from the petitioner nos.1 to 10 consequent upon transfer of the leasehold land to the petitioner no.11 as being without any authority of law.
(2.) It is the case of the petitioner nos.1 to 10 that on 10/7/1935 a permanent lease of Plot no.68 admeasuring 8400 square feet was executed in their favour by the then Municipal Committee of Nagpur. The said lease was thereafter renewed in the year 1964 for a period of thirty years. Though the said lease was liable to be renewed from 1/4/1994 but no steps in that regard were immediately taken. Ultimately, on 2/4/2009 the said lease was renewed for a period of thirty years from 1/4/1994 to 31/3/2024. While renewing that lease the lessor - Municipal Commissioner, City of Nagpur added certain terms and conditions that were not existing in the original lease-deed dtd. 10/7/1935. Clause (i), (j) and (k) are three of the clauses that were inserted while renewing the said lease and the same read as under:-
"(i) The Lessee shall not assign, transfer, alienate, sub-divide or sub-lease the demised land or any part thereof without the previous consent of the Lessor or such authority as may be appointed for that purpose. The Lessor however reserves its right to grant/refuse such permission and resume the land and the standing structure thereon without payment or any compensation. Provided that in case the Lessor decides to grant permission to assign, transfer, alienate, sub-divide or sub-lease the demised land, it shall do so after recovery of the unearned income fixed as per NMC Rules and Govt. Rules framed from time to time in this behalf.
(j) The Lessee, if without the written consent of the Lessor, assigns, sale, transfer, alienates or sub leases the demised land or any part thereof, on presently prevailing cost of the land/premises, the Lessee shall be liable to pay the Unearned Income and penalty as per NMC and Government Rules and as valued by office of the town planner and valuation department on presently prevailing cost of the land/premises of actual cost received by Lessee whichever is higher to the Lessor to get the lease regularized in favour of the assignee or the transferee, failing which the Lessor shall be free to enter upon the said land and repossess it, as if this demise had not been made, after giving notice of 30 days to that effect.
(k) The Lessee, if without the written consent of the Lessor subdivides the demised land into parts and sales any of the part thereof, he shall be liable to pay the charges as per N.M.C. and Government Rules and as valued by the Office of the town planner and valuation department on presently prevailing cost of the land/ premises of actual cost received by Lessee whichever is higher to the Lessor to get the lease regularized in favour of the transferee, failing which the Lessor shall be free to enter upon the said land and repossess it as if this demise had not be made, after giving notice of 30 days to that effect."
In the meanwhile on 16/3/2009 petitioner nos.1 to 10 entered into a Memorandum of Understanding with the petitioner no.11 seeking to transfer the leasehold rights in favour of the petitioner no.11. When the petitioners approached the Nagpur Municipal Corporation seeking mutation of the name of the petitioner no.11, a demand of transfer fees of an amount of Rs.20,85,517.00 was raised. This demand of transfer fees was based on Resolution no.336 dtd. 25/11/2008. Being aggrieved by the fact that transfer fees were being sought pursuant to insertion of fresh clauses while renewing the subsisting lease, the petitioners have challenged the same in this writ petition. The petitioners seek a declaration that insertion of the said terms and conditions is contrary to the law laid by this Court in Smt.Jaikumari Amarbahadursingh & Others Versus State of Maharashtra, through the Secretary, Revenue & Forest Deptt. & Another [2009(1) ALL MR 343].
(3.) Shri A.S. Manohar, learned counsel for the petitioners submitted that it was not permissible for the lessor to insert new and distinct terms and conditions in an existing lease while renewing the same. In the original lease-deed dtd. 10/7/1935 it was provided that at the expiry of the term of thirty years the lease would be renewed at the request of the lessee. The same was subject to fair and suitable enhancement in the rent of the land demised. It was also stated that the terms and conditions incorporated in the original lease would be continued in the lease as renewed. Inviting attention to the law laid down by this Court in Smt. Jaikumari (supra) it was submitted that this Court had held therein that renewal of lease necessarily ought to be on the same terms and conditions as in the earlier lease except the change or revision in respect of annual lease amount. It had been held in clear terms held by relying upon the decision of this Court in State of Bombay Versus Damodar Tukaram Mangalmurti [Appeal No.699/1946 and 700/1946] dtd. 19/6/1959 that it was not open for the lessor to add new conditions while renewing the lease unless the conditions of the tenure so provided. The insertion of new terms and conditions by the Nagpur Municipal Corporation while renewing the lease on 2/4/2009 was therefore contrary to law.
It was then submitted that the resolution dtd. 25/11/2008 passed by the Nagpur Municipal Corporation empowering it to demand transfer fees was without any force of law. Therefore no provision in the City of Nagpur Corporation Act, 1948 (for short, 'the Act of 1948') which empowered the Nagpur Municipal Corporation to seek transfer fees while considering a request for transfer of leasehold rights by a lessee. The said resolution had no legal force especially in view of the judgment of this Court in Smt. Jaikumari (supra) which was delivered on 30/9/2008. The demand of such transfer fees from the petitioners was illegal. In any event, such demand was pursuant to insertion of additional terms and conditions in the lease-deed as renewed and the same was thus illegal. It was then submitted that as lessees, the petitioner nos.1 to 10 had no option but to accept the additional terms and conditions incorporated by the lessor - Nagpur Municipal Corporation while transferring the leasehold rights. If such incorporation of new terms and conditions itself was contrary to law, the mere fact that the petitioners had consented for the same would be of no avail and their consent would not permit the Nagpur Municipal Corporation to demand an amount which it had no authority in law to demand. Inviting attention to the judgment of the Hon'ble Supreme Court in Central Inland Water Transport Corporation Ltd. and Another Versus Brojo Nath Ganguly and Another [AIR 1986 SC 1571 ] it was submitted that insertion of a clause that was contrary to the law operating rendered such term to be against public policy and hence could not be implemented. The petitioners had no option but to accept insertion of those additional terms and conditions since they had no bargaining power with the Nagpur Municipal Corporation. He also referred to the decisions in Writ Petition No.3002 of 2011 [Dilip W. Bhamburkar and Another Versus The State of Maharashtra and Another] decided on 8/8/2011 and Writ Petition No.3765 of 2011 [Pramod Deshraj Budhraja and Others Versus The State of Maharashtra and Another] decided on 23/9/2011 wherein it was held that insertion of a new term that did not exist in the original lease-deed was impermissible. It was thus submitted that the demand of transfer fees by the Nagpur Municipal Corporation was also liable to be set aside. The petitioners had paid the amount as demanded vide notice dtd. 3/9/2010 under protest and that amount was liable to be refunded if the contentions of the petitioners were accepted. It was thus prayed that the petitioners be granted reliefs as prayed for.;
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