Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 281-282 OF 2012

(Arising out of S.L.P. (civil) Nos. 5810-5811 of 2011)

Collector, Distt. Gwalior and another ... Appellants

Versus

Cine Exhibitors P. Ltd. and another ... Respondents

J U D G M E N T

Dipak Misra, J.

Special leave granted in both the petitions.

2. In these two appeals, the defensibility and

legal pregnability of the judgment and order dated 28

th

March, 2010 passed by the Division Bench of High Court of

Judicature of Madhya Pradesh, Jabalpur, Bench at Gwalior

in Writ Appeal No. 234 of 2007 and the order dated 22

nd

2

September, 2010 in R.P. No. 83 of 2010 whereby the

Division Bench has dislodged the order passed by the

learned Single Judge in Writ Petition No. 1718 of 2002

wherein the writ court had declined to interfere with the

order dated 9.8.2002 passed by the Chief Executive Officer,

Gwalior Development Authority (for short “ the GDA”), who,

by the said order, had terminated the lease of the first

respondent herein and directed it to surrender the

possession of the property within seven days, failing which

appropriate action to be taken against it in accordance with

law, is called in question.

3. The succinct expose’ of facts are that the GDA

issued an advertisement for allotment of plot No. 1

admeasuring 40160 sq. feet situated in the locality known

as Mayur Market for the purpose of construction of a

cinema house and, in the public auction, the respondent-

company, the first respondent herein, became the highest

bidder and accordingly, a lease agreement was executed on

27.5.1978 between the GDA and the respondent company.

The said lease agreement was for a period of thirty years

with the stipulation of a right of renewal subject to certain

3

conditions. It was asserted in the writ petition that after

execution of the lease deed, the respondent company

constructed a cinema hall and commenced the business.

As certain disputes arose between the directors of the

company, it was eventually resolved that the licence for

running the cinema should be surrendered and in

consonance with the resolution, a letter was issued to the

Collector concerned, who cancelled the licence for running

the cinema hall. After closure of the cinema hall, the GDA,

by communication dated 2.8.2002, terminated the lease and

directed for handing over possession of the land in question.

4. It was contended before the learned Single

Judge that the notice for cancellation of lease was not

served on it and the allegations that there had been

violation of the terms and conditions of the agreement were

absolutely unsustainable and, therefore, the eventual act of

termination was sensitively susceptible. It was also urged

that as permission was granted for raising permanent

construction, the lease had the character of a permanent

lease and could not have been terminated by the GDA. The

GDA combated the aforesaid stand put forth by the

4

respondent-company and countered the same by

contending, inter alia, that there had been violation of the

terms and conditions of the agreement; that the stance of

putting the lease on the pedestal of a permanent lease was

sans substance; that the plea that the notice for

cancellation of lease was not served was contrary to the

documents brought on record; that reminders were served

on the respondent-company; that the lease was granted for

a specific purpose and when the said purpose had totally

melted into extinction, it was within the legal province of the

GDA to cancel the lease and take appropriate steps for

eviction.

5. The learned Single Judge took note of the

proponements canvassed by the learned counsel for the

parties and posed the question whether the GDA had the

right to terminate the lease of the petitioner and, thereafter,

scanning the terms and conditions of the lease deed,

expressed the view that as there has been cancellation of

the licence of the cinema hall, the order of termination of

the lease was valid and the petitioner would have an

opportunity of hearing before steps are taken for its

5

dispossession. Being of this view, he dismissed the writ

petition. Be it noted, a contention was raised before the

learned Single Judge that the land in question is owned by

the State but the same was granted on lease by the GDA,

which is absolutely impermissible, however, the learned

Single Judge did not think it appropriate to dwell upon the

same on the foundation that the said question will be

decided when the State Government takes any action

against the petitioner by the respondent GDA.

6. Being dissatisfied with the aforesaid order, the

first respondent preferred a writ appeal and the Division

Bench in the intra-court appeal expressed the opinion that

no notice of termination of lease was given despite the same

being imperative and secondly, there was no commission of

breach of the express conditions of the lease deed and

hence, the cancellation was totally unsustainable. With

regard to taking over possession, the Division Bench opined

that the authority cannot assume the jurisdiction of taking

possession without taking recourse to law. It is apt to note

that on behalf of the State, a stand was vigorously

canvassed that when there has been no transfer of the land

6

by the State in favour of the GDA, the grant of lease by the

GDA in favour of the first respondent-company is ab initio

void and, therefore, no right flows in favour of the said

respondent to retain the possession. The learned Judges

repelled the said stand on the base that when the GDA had

granted lease in the auction that was conducted with the

knowledge of the State, it is estopped from raising the plea

that the land had not been transferred to the GDA.

Expressing this view, the appeal was dismissed in the

ultimate eventuality.

7. Mr. B.S. Banthia, learned counsel appearing

for the appellants, questioning the sustainability of the

impugned orders, has raised the following contentions: -

(a)When an issue was raised before the High Court that

the State had not transferred the land in favour of the

GDA and, therefore, the GDA had no authority to deal

with the land in any manner whatsoever, the said facet

should have been dealt with in proper perspective and

not brushed aside on the ground of estoppel.

7

(b)The concept of promissory estoppel does not have any

play when no competent authority of the Government

had transferred the land in favour of the GDA as per

the requisite procedure and as a sequitur, any step

taken by the GDA even in the presence of an officer

will not debar the State to raise the plea as regards its

right, title and interest within the period of limitation.

(c)The grant of lease being per se wholly vulnerable, the

basic infrastructure collapses and once the

infrastructure is foundered, the super structure is

bound to be razed to the ground. To put it differently,

when the GDA had no right to lease the land in

question, the respondent-company cannot claim a

better right as a lessee than that of a lessor.

(d)It has become a common phenomenon to grab public

property by adopting maladroit methodology and,

therefore, the Division Bench should not have scuttled

the right of the State and its authorities on the ground

of estoppel which, in fact, does not arise remotely.

8

(e)The GDA has unequivocally admitted before this Court

that the land in question was not transferred in its

favour. The action taken by the State Government

should be given the stamp of approval.

8. Mr. Dhruv Mehta, learned senior counsel

appearing for the respondent No. 1, countering the aforesaid

submissions, submitted that the approach of the High Court

in the writ appeal cannot be found fault with inasmuch as

the scope of the writ petition out of which the writ appeal

emerged was limited, i.e., whether the lease could be

cancelled by the GDA. It is canvassed by him that there

may be a cavil between the GDA and the State Government

but by any stretch of imagination, the same cannot create

any kind of concavity or dent in the right of the first

respondent to enjoy the benefit of the lease. It is his further

submission that when the State Government has become

totally oblivious of its right, if any, it cannot rise like a

phoenix and put forth its claim to the property. It is

highlighted by him that under the M.P. Town Improvement

Trust Act, 1960 (for short “the 1960 Act”), and Madhya

Pradesh Nagar Tatha Gramin Adhiniyam, 1973 (for brevity

9

“the 1973 Act”) the schemes having come into existence, the

property had vested in the GDA and, therefore, the State

Government has no right to interfere and in that backdrop,

the finding recorded in the intra-court appeal that there has

been lack of notice prior to the cancellation of the lease and

further no violation of any of the postulates of the lease

agreement cannot be flawed.

9. Mr. Neeraj Sharma, learned counsel appearing

for the 2

nd

respondent, the GDA, contended that the land

was recorded as 'Nazul’ meant for the Public Works

Department and was never transferred to the GDA and in

that background, the question of estoppel or acquiescence

by the State Government does not arise. In fact, submits

the learned counsel, by a total mistaken impression, the

land was put to auction and the lease deed was executed in

favour of the first respondent. Additionally, it is

propounded by him that if any dispute has arisen, there is

an arbitration clause which would enable the respondent-

company to agitate its grievances barring eviction especially

when the grant of lease is a void one.

10

10. The seminal issue that emanates for

consideration is whether the Division Bench is justified in

stating in a sweeping manner that when the GDA had

granted the lease of the land in auction within the

knowledge of the State, the State is estopped from raising

any such ground that the land had not been transferred to

the GDA after lapse of thirty years. It is not disputed before

us that the first respondent had not perfected its right, title

and interest by way of adverse possession as it could not

have been. Evidently, the High Court has proceeded on the

basis of the doctrine of promissory estoppel. It is settled in

law that the said doctrine is founded on the principles of

equity and to avoid injustice. The said principle cannot be

soundly embedded or treated to be sacrosanct when a

public authority carries out a representation or a promise

which is prohibited by law or is devoid of the authority of

law. In Union of India and others vs. Godfrey Philips

India Ltd.,

1

a three Judge Bench of this Court has

crystallised the principle thus:-

“....that there can be no promissory estoppel

against the legislature in the exercise of its

1

AIR 1986 SC 806

11

legislative functions nor can the Government or

public authority be debarred by promissory

estoppel from enforcing a statutory prohibition.

It is equally true that promissory estoppel cannot

be used to compel the Government or a public

authority to carry out a representation or promise

which is contrary to law or which was outside the

authority or power of the officer of the

Government or of the public authority to make”

11. In Dr. Ashok Kumar Maheshwari vs. State

of U.P. and another

2

, a two-Judge Bench of this Court,

after referring to the decision in Rishabh Kumar vs. State

of U.P.

3

, proceeded to state as follows: -

“21. This principle was

reiterated in Union of India v. R.C. D’Souza AIR

1987 SC 1172 : (1987) 2 SCC 211, where a

retired army officer was recruited as Assistant

Commandant on temporary basis and was called

upon to exercise his option for regularisation

contrary to the statutory rules. It was held that it

would not amount to estoppel against the

Department.

22. Whether a Promissory

Estoppel, which is based on a ‘promise’ contrary

to law can be invoked has already been

considered by this Court in Kasinka Trading v.

Union of India, (1995) 1 SCC 274 : (1995 AIR

SCW 680) as also in Shabi Construction Co. Ltd.

v. City & Industrial Development Corporation

(1995) 4 SCC 301 wherein it is laid down that the

Rules of “Promissory Estoppel” cannot be invoked

for the enforcement of a ‘promise’ or a

2

AIR 1998 SC 966

3

AIR 1987 SC1576

12

‘declaration’ which is contrary to law or outside

the authority or power of the Government or the

person making that promise.”

In this context, we may profitably refer to the decision of

this Court in M/s. Sharma Transport vs. Government of

A.P. and others

4

, wherein a three-Judge Bench opined that

it is equally settled law that promissory estoppel cannot be

used compelling the Government or a public authority to

carry out a representation or promise which is prohibited by

law or which is devoid of the authority or power of the

officer of the Government or the public authority to make.

In this regard, we may also usefully refer to the observations

made in S. Sethuraman vs. R. Venkataraman and others

5

which is to the effect that if jurisdiction cannot be conferred

by consent, it cannot clothe the authority to exercise the

same in an illegal manner. Recently, in Rajendra

Agricultural University vs. Ashok Kumar Prasad and

others

6

, it has been laid down that non-compliance with the

mandatory statutory requirement will make the act invalid

and cannot be regarded as a representation held out by the

Government creating any right to seek the benefit by

4

AIR 2002 SC 322

5

AIR 2007SC 2499

6

(2010) 1 SCC 730

13

inviting the doctrine of promissory estoppel against the

government.

12. In the case at hand, admittedly, the land is

nazul land meant for the Public Works Department. It had

been urged before the High Court that the land in question

was not transferred in favour of the GDA. The submission

of Mr. Mehta, learned senior counsel for the respondent No.

1, is that the land had vested with the Town Improvement

Trust, Gwalior constituted under the 1960 Act and the said

vesting continued under the 1973 Act. To appreciate the

said submission, we may analyse the scheme of the 1960

Act. The said Act was enacted to consolidate and amend

the law relating to the establishment of improvement trust

for the purpose of making and executing town improvement

scheme in certain towns of Madhya Pradesh. Chapter II of

the Act deals with the Constitution of the Trust. Chapter III

provides for conduct of business. Chapter IV deals with

improvement schemes. Various schemes are being

enumerated under various provisions in the said chapter.

Section 52 which occurs in Chapter IV provides for issuance

of notification of sanction of improvement schemes and

14

order regarding vesting a property in the Trust. The said

provision being relevant is reproduced below : -

“52. Notification of sanction of improvement

scheme and order regarding vesting of property in the

Trust. – (1) Whenever the State Government sanctions an

improvement scheme, it –

(a)shall announce the fact by notification and

except in the case of a deferred street

scheme, development scheme, or town

expansion scheme, the Trust shall forthwith

proceed to execute the same; and

(b)may order that any street, square, park,

open space or other land, or any other part

thereof, which is the property of the

Government and managed by the Central

Government or the State Government shall,

subject to such condition as it may impose,

vest in the Trust for the purpose of the

scheme.

(2) The publication of a

notification under sub-section (1) in respect of

any scheme shall be conclusive evidence that the

scheme has been duly framed and sanctioned.”

On scanning of the aforesaid provision, it is luminous that

sub-Section (2) of Section 52 postulates that publication of

a notification under sub-section (1) in respect of any scheme

15

shall be conclusive evidence that the scheme has been duly

framed and sanctioned.

13. Chapter V of the Act deals with acquisition

and disposal of land. Section 67 empowers the Trust to

acquire by purchase, lease or exchange any land within the

area comprised in a sanctioned scheme for many persons

under an agreement with such person. Section 68 provides

for notice of acquisition of land. As the learned senior

counsel for the respondent has placed heavy reliance on the

said provision, the same is reproduced below :-

“68. Notice acquisition of land- (1) If in the

opinion of the Trust any land is required for the

purposes of any scheme sanctioned by the State

Government under Section 51, the Trust shall by

a notice published in the Gazette and in such

other manner may be prescribed, signify its

intention to acquire such land. Such notice shall

specify the place where and the hours during

with the maps and specifications of the land

proposed to be acquired may be inspected.

(2) The owner of the land

which has been notified under sub-section (1) or

any other person interested therein may object to

the acquisition of such land within 80 days after

the publication of the notice in the Gazette.

(3) Every objection under sub-section (2) shall be

made to the Trust in writing and the Trust shall

give the objector an opportunity of being heard in

person or by a duly authorised agent or pleader

16

and shall after hearing all such objections and

making such further inquiry, if may, as may be

necessary,” take such decision as it may deem

fit.”

On a plain reading of the aforesaid provision, it is clear as

noon day that if in the opinion of the Trust any land is

required for the purpose of any scheme sanctioned by the

State Government under Section 51, the Trust shall by notice

published in the Gazette and by any such other manner as

may be prescribed, signify its intention to acquire such land.

Such notice, as stipulated therein, shall specify the place etc.

The rest of the provision is, in a way, procedural in nature.

Section 69 makes a provision whereunder the Trust may

apply to the State Government for sanction to acquire the

land. Section 70 provides for procedure for sanction of

acquisition. Section 71 provides for notification of acquisition

and vesting of land in the Trust.

14. Mr. Mehta has drawn immense inspiration

from Section 71 which is as follows:-

“71. Notification of acquisition and vesting of

land in Trust – (1) After the acquisition of land is

sanctioned by the State Government under

Section 70 the Trust may acquire such land by

17

publishing in the Gazette a notice stating that it

had decided to acquire the land and has obtained

the sanction of the State Government for the

acquisition thereof.

(2) When a notice under

sub-section (1) is published in the Gazette the

land shall, on and from the date of such

publication, vest absolutely in the Trust free from

all encumbrance.

(3) Where any land is vested

in the Trust under sub-section (2), the Trust

may by notice in writing , order any person who

may be in possession of the land to surrender or

deliver possession thereof to the Trust or any

person duly authorised by it in this behalf within

thirty days of the service of the notice.

(4) If any person refuses or fails to comply with

an order made under sub-section (3), the Trust

may take possession of the land and may for that

purpose cause to be sued such force as may be

necessary.”

15. On a closer scrutiny of the schematic

conception of the Act, especially the provisions contained in

Chapter 5 of the 1960 Act dealing with the acquisition of

land belonging to private persons, it is demonstrable that

the various provisions deal with the acquisition and

improvement of the area under the planned schemes. It

is seemly to note that the type of improvement schemes

being delineated under Section 31 of the 1960 Act are

18

fundamentally general improvement schemes, re-building

scheme, re-housing schemes, a street scheme, deferred

street scheme, development scheme, housing

accommodation scheme, town expansion scheme, drainage

or drainage including sewage disposal scheme; and

playground, stadium and recreation ground scheme. The

aforesaid has nothing to do with the land belonging to the

State Government. Any land coming under the scheme or

covered under it has to be governed by the procedure and

guidelines for improvement. It is a different concept

altogether.

16. We will be failing in our duty if we do not

refer to certain provisions, namely, Sections 38 and 87 of

the 1973 Act as our attention has been drawn by Mr.

Mehta, learned counsel for the respondent No. 1. They

read as follows:

“38.Establishment of Town and Country

Development Authority . – (1) The State

Government may, by notification, establish a

Town and Country Development Authority by

such name and for such area as may be

specified in the notification.

(2)The duty of implementing the

proposal in the development plan, preparing

19

one or more town development schemes and

acquisition and development of land for the

purpose of expansion or improvement of the

area specified in the notification under sub-

section (1) shall, subject to the provision of

this Act vest in the Town and Country

Development Authority established for the said

area.

Provided that the duty imposed on the

Town and Country Development Authority

shall, till that authority is established for any

area under sub-section (1), be performed by

the local authority having jurisdiction over

such area as if it were a Town and Country

Development Authority established under this

Act.

(3)On the establishment of the Town

and Country Development Authority for the

area to which the proviso to sub-section (2)

applies, the following consequences shall

ensue in relation to that area, namely : -

(i)all assets and liabilities acquired

and incurred by the local authority in the

discharge of the duty under the proviso to sub-

section (2) shall belong to and be demand to be

the assets and liabilities of the Town and

Country Development Authority established in

place of such local authority;

(ii)all records and papers belonging to

the local authority referred to in clause (i) shall

vest in and be transferred to the Town and

Country Development Authority established in

its place.

xxx xxx xxx xxx

87.Repeal, Savings and construction of

references. (1)As from the date of, -

20

(a) the coming into force of the provisions of

Chapter II the reference to Chief Town

Planner in any enactment for the time

being in force, shall be construed as a

reference to the Director;

(b) the Constitution of a planning area, the

following consequences shall ensue,

namely –

(i) The Madhya Pradesh Town Planning

Act, 1948 (No. 17 of 1948), shall stand

repealed in such area;

(ii) any land use map, draft development

or development plan prepared under the

said Act, shall be deemed to have been

prepared under this Act and all papers

relating thereto shall stand transferred to

the Director;

(C) the establishment of the Town and

Country Development Authority for any

area the following consequences shall

ensue in relation to that, area, namely –

(i) the Madhya Pradesh Town

Improvement Trust Act, 1960 (No. 14 of

1961), shall stand repealed in its application

to the said area,

(ii) the Town Improvement Trust

functioning within the jurisdiction of the

Town and Country Development

Authority so established shall stand

dissolved and any Town Improvement

Scheme prepared under the said Act,

shall in so far as it is not inconsistent

with the provisions of this Act be deemed

to have been prepared under this Act,

(iii) all assets and liabilities of the Town

Improvement Trusts shall belong to and

be deemed to be the assets and liabilities

21

of the Town and Country Development

Authority established in place of such

Town Improvement Trust under Section

38;

iii-a) grants and contributions payable to the

Town Improvement Trust shall continue

to be payable to the Town and Country

Development Authority established in

place of such Town Improvement Trust

under Section 38;

(iv) all employees belonging to or under

the control of the Town Improvement

Trust referred to in sub-clause (ii)

immediately before the date aforesaid

shall be deemed to be the employees of

the Town and Country Development

Authority established for such area under

Section 38;

Provided that the terms and conditions of

service of such employees shall be the same

until altered by the Town and Country

Development Authority with the previous

sanction of the State Government :

Provided further that no sanction under

the foregoing proviso shall be accorded by the

State Government until the person affected

thereby is given a reasonable opportunity of

being heard;

(v) all records and papers belonging to the

Town Improvement Trusts referred to in sub-

clause (ii) shall vest in and be transferred to

the Town and Country Development

Authority established in its place under

Section 38.

(2) Notwithstanding the repeal of the Madhya

Pradesh Town Improvement Trusts Act,

1960 (No. 14 of 1961) (hereinafter

referred to as the repealed Act), under

22

sub-clause (i) of clause (c) of sub-section

(1), -

(a) all cases relating to compensation in

respect of acquisition and vesting of land

in the Town Improvement Trust under

Section 71 of the repealed Act and

pending before the Town Improvement

Trust or the Tribunal or the Court of the

District Judge or the High Court

immediately before the date of such

repeal shall be dealt with and disposed of

by –

(i) the Town and Country Development

Authority established in place of such

Town Improvement Trust under Section

38;

(ii) the Tribunal to be constituted under

Section 73 of the repealed Act after the

commencement of the Madhya Pradesh

Nagar Tatha Gram Nivesh (Sanshodhan)

Adhiniyam, 1979;

(iii) the Court of the District Judge;

(iv) the High Court;

As the case may be, in accordance with

the provisions of the repealed Act, as if

this Act had not been passed;

(b) the Town and Country Development

Authority, the Tribunal, the Court of the

District Judge or the High Court, as the

case may be, may proceed to deal with

and disposed of the same from the stage

at which such cases were left over at the t

ime of repeal.”

23

17. If we have correctly understood the

submission of Mr. Mehta, learned senior counsel, he has

placed reliance on the said provisions solely for the purpose

that the right created in favour of the GDA remained

unaffected and, in fact, was protected under the 1973 Act.

There is no cavil over the said proposition of law. But, a

pregnant one, the crux of the matter is whether the land

that was recorded as Nazul land meant for the Public Works

Department got transferred to the GDA so that its right got

concretized.

18. It is apt to note that the lands belonging to the

State Government are dealt with in the Revenue Book

Circular and nazul lands are specifically adverted to in Part

IV of the said Circular. It deals with management and

disposal of nazul lands within the limits of Municipal

Corporation, municipal towns and notified areas. Under the

heading ‘What is Nazul’, it has been stated thus: -

“‘Nazul’ and ‘Milkiyat Sarkar’ Land which is the

property of Government and which –

(a)is not included in a holding in a village;

24

(b)is not recorded as Banjar, scrub jungle, hills

and rocks, rivers, village-forest or

Government-forest;

(c)is not recorded as village roads, Gothan,

grazing land Abadi and pastures;

(d)is not reserved for any communal purpose

for the Nistar of the village; and

(e)is not service land;

falls under two classes viz. “Nazul” and “Milkiyat

Sarkar”. Nazul includes such Government land

as is used either for building purposes or

purposes of public convenience such as markets,

or recreation grounds or which is likely to be

used for such purposes in future.

Government land in the

occupation or on the books of a department of

the State Government or of the Central

Government are not to be excluded from the

classification and will be recorded as “Nazul” or

“Milkiyat Sarkar”, as the case may be. In brief, it

may be stated that “Nazul” is that land which has

a site value as opposed to an agricultural value.”

Clause 12 of Section IV provides how nazul land can be

disposed of. It reads as follows: -

“12. Nazul land can be

disposed of in the following ways: -

(1)by permanent lease;

(2)by temporary lease;

(3)on no-claim agreement;

(4)on annual licence; and

25

(5)transfer in favour of a department of the

State Government or other State

Governments or the Government of India

and vesting in favour of a local body.”

Clause 13 deals with the manner in which permanent leases

are granted and Clause 14 deals with reservation of special

plots. For the sake of completeness, both the Clauses are

reproduced below: -

“13. Permanent leases – (i)

Permanent leases are granted either through

auction or without auction.

(ii) Permanent lease may be

granted without auction in the following cases: -

(1)When the land in question is adjacent

to the land of the applicant and will

not be of any use to any person other

than the applicant.

(2)When it is decided to condone the

encroachment of an encroacher and to

grant the encroached area to the

encroacher on permanent lease.

(3)When the land in question will be used

for religious charitable, educational,

co-operative, public or social purposes.

(4)Plots given to very poor persons in a

locality where only poor persons live.

(5)Any other land for which there are

adequate reasons for foregoing

auction, e.g., land required by the

Madhya Pradesh Electricity Board,

State Road Transport Corporation, etc.

26

14. Reservation of special

plots. – At regular settlement all Government

plots or sites which are likely to be valuable for

any special reason, such as their situation near a

line of railway or the like, or which in any scheme

of development have been set aside as specially

valuable or as being required for a public purpose

are marked of by the Settlement Officer in

consultation with the Collector as reserved and

the disposal of all such plots will be subject to

the sanction of the State Government upon such

special terms as may be decided for each plot.

All land within a radius

of 100 yards of a railway station and all land

within 40 yards of a railway station boundary

should be reserved.

There will necessarily be

exceptions such as for instance where there is a

lay out already sanctioned by Government the

Collector will maintain a list of these plots and

with the approval of the State Government will

alter it as the changing circumstances of the

town may demand.”

19. The Revenue Book Circular also stipulates

that the classification of land is done at the time of

settlement. The Collector of the district has been bestowed

with the power to make alterations in the settlement

classifications on the ground that they have been incorrectly

made or that the purpose for which the land was used had

changed in the settlement. In such type of cases, 'Abadi’

27

lands are recorded as nazul lands and, accordingly, the

vacant spaces are administered as nazul lands. The

aforesaid schematic concept read with the language

employed in the 1960 Act and the 1973 Act would clearly

reveal that nazul land, unless notified, does not

automatically get vested in any authority or trust. The State

Government, from time to time, has been issuing

notifications to the effect of vesting or transferring of nazul

land to be part of improvement trust and giving advance

possession to the Town Improvement Trust. That apart, the

State Government has issued notifications framing

guidelines for distribution of the Nazul plots.

20. It is not out of place to mention here that this

Court in Akhil Bhartiya Upbhokta Congress vs. State of

Madhya Pradesh and Ors

7

. had not approved the manner

in which the State Government had granted the land

belonging to the State in favour of the appellant therein.

After referring to the Revenue Book Circular, this Court

decried the action of the State Authorities in allotment of

Nazul land without following the criteria and by treating it

7

AIR 2011 SC 1834

28

as State largesse wherein the public has an interest. After

the said decision was rendered on 06.04.2011, the State of

Madhya Pradesh, Department of Revenue, has issued

Circular No. 6-53/2011-Nazul dated 8.8.2011 describing

certain guidelines in the distribution of Nazul land. In the

said circular, it has been stated that the said circular shall

be treated as a part of Section 1 of the Revenue Book

Circular.

21. We have referred to these aspects singularly to

highlight that unless affirmative steps are taken by the

State Government by issuing a notification changing the

character of the land and transferring it in favour of any

authority, corporation or municipality, it maintains its own

character, i.e., nazul land. In the case at hand, the land is

recorded as nazul land for the Public Works Department.

Nothing has been brought on record that it had ever been

notified for transfer in favour of the GDA. Thus analysed,

the GDA never became the owner of the land or had the

authority to deal with the land and, therefore, it could not

have put the land to auction for any purpose whatsoever.

Ergo, the first respondent cannot assert any right or

29

advance any claim to remain in possession and run the

cinema hall and that too after cancellation of the licence,

solely on the basis of a lease granted by its lessor, a

statutory authority, who had no right on the land for the

simon pure reason that the ownership still remained with

the State Government. When no right lies with the GDA in

respect of the land in view of the conditions precedent as

stipulated in the Revenue Book Circular not having been

satisfied and the nature of the land has remained in a

sustained state, no legal sanctity can be attached to the

lease executed by it in favour of the Ist respondent. The

grant is fundamentally ultra vires and hence, the

respondent-company has to meet its Waterloo.

22. Quite apart from the above, it is condign to

note that in a case of the present nature, the common law

doctrine of public policy can be invoked. The said doctrine

becomes enforceable when an action affects or offends

public interest or where injury to the public at large is

manifest. As is perceptible, the GDA could not have granted

the lease of the property belonging to the State Government

as it was Nazul land meant for the Public Works

30

Department. The collective interest in the property could

not have been jeopardised by usurpation of power/authority

by the GDA. Such assumption of power by the GDA makes

the whole action sans substratum and thereby a nullity.

Needless to say, any grant has to have legal sanctity and

legitimacy.

23. For the reasons aforementioned, the appeals

are allowed and the orders passed in the writ appeal and

the application for review, being unsustainable, are set

aside. The State Government and its functionaries are at

liberty to proceed against the first respondent for its

eviction. It is open to the first respondent to take recourse

to the arbitration clause against the GDA for any other relief

as advised in law. There shall be no order as to costs.

.....................................J.

[Dalveer Bhandari]

.....................................J.

[Dipak Misra]

New Delhi;

January 11, 2012.