Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 2548 OF 2006

State of West Bengal and others …..Appellant(s)

versus

Calcutta Mineral Supply Co. Pvt. Ltd.

and another ...Respondent(s)

WITH

CIVIL APPEAL NOs. 2549 OF 2006

Collector, Jalpaiguri and another …..Appellant(s)

versus

Darjeeling Dooars Plantations (Tea) Ltd.

and another ...Respondent(s)

JUDGMENT

M. Y. EQBAL, J.

These appeals by special leave are directed against the

common judgment and order dated 6.10.2005 of the Calcutta

High Court, whereby Division Bench of the High Court allowed

the writ petitions preferred by the respondents herein against

1

Page 2 the decision of the West Bengal Land Reforms and Tenancy

Tribunal (in short, ‘the Tribunal’) dismissing their original

applications moved against the respective order passed by the

Government of West Bengal resuming the lands held by them.

2.By the impugned judgment, the High Court has disposed

of three writ petitions primarily observing that although the

facts are different there are certain communions of identity

within the question to be answered and certain common

principles of law are involved in the writ petitions.

3.In the matter of Calcutta Mineral Supply Co. Pvt. Ltd.

(being Civil Appeal No.2548 of 2006), the respondent-writ

petitioner held the land measuring about 4.54 acres

comprised in a factory or mill together with structures even

before the West Bengal Estates Acquisition Act, 1953 (in short,

‘WBEA Act’) came into force. Factual matrix of this case is

2

Page 3 that as a result of notification under Section 4 and effects

thereof under Section 5 of the WBEA Act all the land

comprised in factory vested in the State. However, by reason

of Section 6(1)(g) read with Section 6(3) of that Act, the

Company was allowed to retain all the lands comprised in

factory as the State Government was of the opinion that the

Company required all the lands for the purpose of the factory.

4.However, in 1996, it came to the notice of the State

Government that the Company had alienated almost half of

the land and no land was being used for the purpose of the

factory, which remained closed since 1993. In exercise of the

power conferred on it by the proviso to Section 6(3) of the Act,

the State Government by order dated 2

nd

April, 1996 revised

the order and resumed 3.76 acres of land as surplus as in the

opinion of the State Government the company did not require

the land for the purpose of running its factory. The Company

challenged that order by way of a writ petition, which stood

3

Page 4 transmitted to the aforesaid Tribunal and was dismissed.

Aggrieved by the decision of the Tribunal, the Company

preferred writ petition before the High Court. The Division

Bench of the High Court set aside order of the Tribunal

holding that order dated 2

nd

April, 1996 was not a speaking

order and directing the State Government to consider the

matter afresh. Thereafter, Special Secretary of the State

Government passed speaking order directing resumption of

the land allowed to be retained by the respondent-Company.

This order was challenged by the respondents, but the

Tribunal dismissed their application.

5.Aggrieved by the decision of the Tribunal, Company again

moved the High Court by way of a writ petition, which was

allowed by the Division Bench of the High Court by the

impugned judgment. The High Court quashed the order of

resumption passed by the State Government as also the

judgment of the Tribunal and held that the exercise of power

4

Page 5 under the WBEA Act in the instant case was without

jurisdiction and that the respondents having held land within

the ceiling limit had acquired the status of raiyat with

heritable and transferable right and cannot be subjected to

Section 14-Z of the West Bengal Land Reforms Act.

6.In the matter of Darjeeling Dooars Plantations (Tea) Ltd.

(being Civil Appeal No.2549 of 2006), the tea estate known as

Zurantee Tea Estate (Zurantee) was leased out by the

Government of West Bengal in favour of Chulsa Tea Company

(in short, ‘Chulsa’) being limited for a period of 30 years on

30

th

January, 1975. In the record of right prepared under the

WBEA Act, the land was recorded to have been permitted to be

retained under Section 6(3) of the WBEA Act. The original

lease was granted on 1

st

April, 1924 and expired before the

WBEA Act came into force. In 1976, Chulsa sold Zurantee to

Darjeeling Dooars Plantations (Tea) Ltd. (in short,

‘respondent-Company’).

5

Page 6 7.By an order dated 25

th

August, 1976, the tea estate was

mutated in favour of respondent-Company. In a Company

Petition of 1990, High Court had allowed a scheme of

amalgamation between the respondent-Company, the

transferor, and Karala Valley Tea Co. Ltd. (in short, ‘Karala’),

the transferee, under which Scheme, the name of transferee

Karala was changed to Darjeeling Dooars and all rights, title

and interest of Darjeeling Dooars vested in it. Subsequently

by an order dated 18

th

November, 1991, the Land Registration

Collector allowed mutation of the name in respect of Zurantee

in favour of Darjeeling Dooars.

8.The Government of West Bengal issued a notification on

1

st

June, 1994 amending Schedule ‘F’ of the WBEA Rules

inserting Clause 1A and 1B to be incorporated in the lease

requiring payment of salami of Rs.15,000/- per hectare of land

leased out before further renewal of the lease in cases renewal

6

Page 7 was asked for by a transferee allowing the transferee to enjoy

the balance period of the lease transferred. The

respondent-Company applied for the renewal of lease of the

Zurantee for a period of 30 years on 10

th

March, 1998 and a

deed renewing the lease was executed on 12

th

March, 1998 in

favour of the respondent-Company. In March, 2002, the

Collector demanded a sum of Rs.1,10,50,200/- as salami in

respect of renewal of the said lease pursuant to the amended

clause, which was challenged by the respondent-Company

before the Tribunal. Upon the matter being remanded by the

Tribunal, the Collector again held that the

respondent-Company was liable to pay salami and directed the

Company to deposit the same. The respondent-Company

again moved before the Tribunal by way of an application,

which was dismissed. The Tribunal upheld the notification

imposing salami on transfer of tea estate. Aggrieved by the

order, the respondent-Company moved the High Court by way

of writ petition, which was allowed by the Division Bench of

the High Court by the impugned judgment. Holding that the

7

Page 8 respondent-Company was entitled to renewal of the lease

without payment of salami, the High Court quashed the order

of the Tribunal as well as the order of the Collector and the

letter of demand.

9.Hence, these two appeals by special leave have been

preferred by the State Government and its functionaries under

Article 136 of the Constitution.

10.Now we shall discuss the facts and law applicable thereto

separately for better appreciation of the case of the parties.

Civil Appeal No.2549 of 2006

(Collector, Jalpaiguri and another vs. Darjeeling Dooars

Plantations (Tea) Ltd. and another)

11.Admittedly in the year 1924, the appellant granted a

lease of the property for a period of 30 years, which expired in

1954. The respondent continued in possession till 1974 when

a fresh lease deed was executed on 30.1.1975 in favour of

8

Page 9 Chulsa Tea Company Limited in respect of Zurantee Garden.

The lease was made effective from 25.3.1968. Some of the

terms and conditions of the lease which are relevant in the

present case, are as under:

“(4)(a) That the Lessee/Lessees shall at all times

observe and conform to the relevant provisions of

the West Bengal Estates Acquisition Rules for the

time being in force.

(b)That in respect of land comprised in a forest

the Lessee/Lessees shall be subject to the control

and supervision of the State Government.

xxxxxxxx

(13) (a) That the Lessee shall not transfer, whether

in full or in part, or club or amalgamate tea-gardens

without the formal sanction of the Collector;

Provided that except in cases where the provisions of

the West Bengal Alienation of Land (Regulation) Act,

1960 (West Bengal Act XVI of 1960), apply, no such

sanction shall be necessary for equitable mortgage

of a tea-garden with a Scheduled Bank by the

deposit of title deeds. All such equitable mortgages

shall, however, be referred to the Collector

immediately.

(b)That the lease-hold interest shall be heritable.

(c)That in the case of a transfer of such

lease-hold interest, whether in full or in part, the

same shall be subject to the provision of any law for

the time being in force and applicable thereto and

also subject to prior consent of the Collector.

xxxxxxxx

9

Page 10 (16) (a) That the Lessee/Lessees shall be entitled to

the renewal of the lease for a further period of thirty

years and to successive renewals for similar periods,

subject to the rules and the terms and conditions of

this lease and the such other terms and conditions

as the State Government may from time to time

consider it necessary to impose and include in such

renewed lease or leases and subject further to such

rent as may then be fixed, provided that such

additional terms and conditions shall not be

inconsistent with the law regulating such lease and

shall not have retrospective effect.”

12.From the aforementioned terms and conditions contained

in the lease deed of 1975, it is clear that the respondent lessee

shall observe and conform to the relevant provisions of the

West Bengal Estates Acquisition Rules for the time being in

force. Clause 13(a) further provides that the lessee shall not

transfer without the formal sanction of the Collector and

Clause 13(c) provides that the transfer shall be subject to any

law for the time being in force and also subject to prior

consent of the Collector.

10

Page 11 13.Clause 16(a) of the lease deed contains a renewal clause

according to which the lessee shall be entitled to the renewal

of the lease for a further period of thirty years and to

successive renewals for similar periods, subject to the rules

and the terms and conditions of this lease and also such other

terms and conditions as the State Government may from time

to time consider it necessary to impose and include in such

renewed lease or leases and subject further to such rent as

may then be fixed. However, such additional terms and

conditions shall not be inconsistent with the law regulating

such lease and shall not have retrospective effect.

14.Indisputably, during the subsistence of the lease, the

respondent Darjeeling Dooars Plantations (Tea) Ltd. and the

Karala Valley Tea Company were amalgamated and all the

properties, rights and interest stood transferred to the

respondent Darjeeling Dooars Plantations (Tea) Ltd. by the

order passed by the Calcutta High Court on 31.10.1990 in a

11

Page 12 Company petition. It is also not in dispute that the name of

the respondent Darjeeling Dooars Plantations (Tea) Ltd. was

mutated by the order of the Collector dated 28.11.1991.

15. Originally the lease was granted in the year 1924 for a

period of 30 years. Before the expiry of the period of lease,

the West Bengal Estates Acquisition Act, 1953 came into force

in the State of West Bengal. According to Section 4 of the Act,

all estates and the rights of every intermediary in each such

estate stood vested in the State free from all encumbrances

with effect from the date of notification time to time issued by

the State Government. Section 5 of the said Act deals with the

effect of the notification. Section 6 of the said Act lays down

the provisions with regard to right of intermediary to retain

certain lands. Section 6 reads as under:

“6. (1) Notwithstanding anything contained in

sections 4 and 5, an intermediary shall, except

in the cases mentioned in the proviso to

sub-section (2) but subject to the other

provisions of that sub-section, be entitled to

retain with effect from the date of vesting—

12

Page 13 (a) xxxxxxxxxx

(b) xxxxxxxxxx

(c) xxxxxxxxxx

(d) xxxxxxxxxx

(e) xxxxxxxxxx

(f) subject to the provisions of sub-section (3),

land comprised in tea gardens or orchards or

land used for the purpose of livestock breeding,

poultry farming or dairy;

(g) xxxxxxxxxx

xxxxxxxxxx

(2) An intermediary who is entitled to retain

possession of any land under sub-section (1)

shall be deemed to hold such land directly under

the State from the date of vesting as a tenant,

subject to such terms and conditions as may be

prescribed and subject to payment of such rent

as may be determined under the provisions of

this Act and as entered in the record-of-rights

finally published under Chapter V except that no

rent shall be payable for land referred to in

clause (h) or (i) :

Provided that if any tank fishery or any land

comprised in a tea-garden, orchard, mill, factory

or workshop was held immediately before the

date of vesting under a lease, such lease shall be

deemed to have been given by the state

Government on the same terms and conditions

as immediately before such date subject to such

modification therein as the State Government

may think fit to make.

(3) In the case of land comprised in a tea-garden,

mill, factory or workshop the intermediary, or

where the land is held under a lease, the lessee,

shall be entitled to retain only so much of such

land as, in the opinion of the State Government,

is required for the tea-garden, mill factory or

13

Page 14 workshop, as the case may be, and a person

holding under to be an intermediary:

Provided that the State Government may, if it

thinks fit so to do after reviewing the

circumstances of a case and after giving the

intermediary or the lessee, as the case may be,

an opportunity of being heard, revise any order

made by it under this sub-section specifying the

land which the intermediary or the lessee shall

be entitled to retain as being required by him for

the tea-garden, mill, factory or workshop, as the

case may be.

Explanation:—The expression “land held under

a lease” includes any land held directly under

the State under a lease.

Exception:-In the case of land allowed to be

retained by an intermediary or lessee in respect

of a tea-garden, such land may include any land

comprised in a forest if, in the opinion of the

State Government, the land comprised in a

forest is required for the tea-garden.”

16.Reading relevant provisions of Section 6, it is manifest

that an intermediary, in possession of the land including tea

garden, shall be entitled to retain subject to the provisions

contained in sub-section (3) of Section 6 of the said Act.

Sub-section 3 very clearly provides that the lessee in

possession of tea garden etc. shall continue and shall be

deemed to be an intermediary.

14

Page 15 17. Section 59 of the WBEA Act empowers the State

Government to frame rules for carrying out the purpose of the

Act. Section 59 of the Act reads as under:

“Section 59 - Power to make rules

(1) The State Government may, after previous

publication, make rules for carrying out the

purposes of this Act.

(2) In particular, and without prejudice to the

generality of the foregoing power, such rules

may provide for all or any of the matters which,

under any provision of this Act, are required to

be prescribed or to be provided for by rules.”

18.In exercise of the power conferred by Section 59 of the

Act, the West Bengal Estates Acquisition Rules, 1954 was

framed and the same was published in the official Gazette vide

Notification dated 28.5.1954. Rule 4 of the said Rules inter

alia provides that the land retained by an intermediary under

the provisions of sub-section (1) of Section 6 shall be held by

him from the date of vesting on the terms and conditions

specified in the Rules. So far as the tea garden is concerned,

15

Page 16 it has been specifically provided that an intermediary shall

hold such land on the terms and conditions set out in

Schedule F appended to the Rules. Therefore, for better

appreciation, Schedule F and the Form-1 for the purpose of

granting lease for tea garden have been reproduced here.

“SCHEDULE F

[Rule 4]

1.Land comprised in a tea garden retained by

an intermediary under sub-section (1), read

with sub-section (3), of section 6 shall be

deemed to be held directly under the State

from the date of vesting as a tenant [until a

lease is granted in Form I appended to this

schedule, on such terms and conditions as

may be specified by the Collector in a

summary settlement, and thereafter, on a

lease being granted in Form I appended to

this schedule, on the terms and conditions

specified in such lease]. There shall be a

lease in Form I in respect of each such

intermediary, and the same shall be

registered and numbered in the office of the

Collector.

1A xxxxxxxxxxxxxxxxxxxx

1B xxxxxxxxxxxxxxxxxxxx

2.The first lease shall be given from the date of

the order under sub-section (3) of section 6 or

from the date of the determination of the rent

under section 42, whichever is later.”

16

Page 17 19.By Notification dated 1.6.1994 issued by the Government

of West Bengal, Land & Land Reforms Department, an

amendment has been brought in Schedule F to the said Rules

discussed hereinabove. By the said notification, two

sub-paragraphs being 1A and 1B were inserted, which are

reproduced hereunder:

“1A.When the lease of a tea garden is

determined and the tea garden is leased afresh

to a new lessee, the later shall be liable to pay

salami at the rate of Rs.15,000/- per hectare of

the land leased out.

1B.In case of a transfer of the leasehold

interest, except by way of inheritance, the

transferee shall not be liable to pay salami

during the unexpired period of the lease. On the

expiry of the transferred lease, he shall be liable

to pay salami at the rate of Rs.15,000/- per

hectare of the land leased out before the lease is

further renewed.”

20.In Clause (13), sub-clause (dd) was also inserted, which

is quoted hereinbelow:

“(dd) That the transferee, other than by

inheritance, shall be required to enter into a

fresh lease on payment of salami at the rate laid

17

Page 18 down in paragraph 1B of Schedule F within

three months of expiry of the unexpired period of

lease.”

21.It is therefore manifest that when a lease of the tea

garden is determined by efflux of time and a lease is granted

afresh to new lessee, the latter shall be liable to pay salami at

the rate of Rs.15,000/- per hectare of the land leased out.

Clause 1B also provides that the transferee shall not be liable

to pay salami during the unexpired period, but on the expiry of

the lease, he shall be liable to pay salami at the rate of

Rs.15,000/- per hectare of the land leased out before the lease

is further renewed.

22.Admittedly, the lease of 1975, which became effective

from 1968, got expired in the year 1998. The respondent then

approached the Government for renewal of the lease. The

Collector prepared a lease deed incorporating the terms and

conditions contained in the earlier lease and referred it to the

Government for final approval. The request of the respondent

18

Page 19 for grant of lease was considered by the Government and by

order as contained in letter dated 5.10.2001, addressed to the

District Magistrate & Collector, Jalpaiguri, informed that the

Government will accord post facto approval to the renewal of

the lease for a further period of 30 years on payment of salami

of Rs.15,000/- per hectare. The letter dated 5.10.2001 is

reproduced hereunder:

“Government of West Bengal

Land and Land Revenue Department

Land Reforms Branch

L.R. Bench

No.4051-LR/3T-69/04

Dated, Kolkata, the 5

th

October, 2001

From: The Deputy Secretary to the Govt. of West

Bengal

To: The District Magistrate & Collector,

Jalpaiguri, P.O. & Dist. Jalpaiguri.

Sub: Proposal for post-factor approval to the

renewal of lease of the land comprised in

Zurantee Tea Garden in Jalpaiguri District.

The undersigned is directed to refer to the

above subject and to say that post-facto

approval to the renewal of lease of the land

comprised in Zurantee Tea Garden for the period

of 30 years in favour of M/s. Darjeeling Dooars

Plantation (Tea) Limited will be accorded after

salami @ Rs.15,000/- per hectare and other

dues, if any, are realized from the concerned

19

Page 20 Company. Till such post-facto approval is

accorded, renewal accorded by him will remain

inoperative.

He is, therefore, requested to realize all the

dues and report compliance thereof to the

Department with the certificate that there is no

arrear dues from the concerned companies so as

to enable the Govt. in the Land & Land Reforms

Department to accord necessary post-facto

approval as so proposed by him.

He is also requested to furnish the copy of

relevant documents particularly the copy of the

High Court’s order and copy of certificate of

incorporation issued by the Registrar of

Companies based on which Mutation case no.

IV-5 of 1991-92 was finalized and mutation was

allowed.

Sd/-

Deputy Secretary to the Govt. of West Bengal”

23.In pursuance to the decision taken by the State

Government, an order was passed by the Collector, Jalpaiguri

dated 29.11.2002 directing the respondent to deposit

Rs.15,000/- per hectare as salami at the time of renewal

before according approval of the Land & Land Revenue

Department. The order was communicated to the respondent

and the same came to be challenged before the Land Reforms

and Tenancy Tribunal. The respondent sought a declaration

20

Page 21 that the Notification dated 1.6.1994 and amendments of the

Rules in Schedule F and Form 1 thereto are illegal and

unconstitutional. The said application was rejected by the

Tribunal. However, by the impugned order, the High Court

allowed the writ petition and quashed the order of the

Tribunal.

24.We have heard Mr. Rakesh Dwivedi, learned senior

counsel appearing for the appellant-State and Mr. A.K.

Ganguli, learned senior counsel appearing for the

respondent-Company in Civil Appeal No.2549 of 2006.

25.Mr. Dwivedi assailed the order of the High Court as being

contrary to the facts of the case and mis-appreciating the

status of the respondent by recognizing it as a lessee and not

as a transferee. Mr. Dwivedi submitted that Clause 1A and

1B, as inserted by the amendment, will apply on its own

21

Page 22 course as even the inclusion of these clauses in the lease deed

is not necessary. According to the learned counsel, Clause

16(a) was already there in the previous lease and as per the

said clause additional conditions to the subsequent lease can

be included. Mr. Dwivedi submitted that post facto sanction

by the State Government is a pre-condition for payment of

salami and for that reason the lease deed executed by the

respondent was signed by the Collector and forwarded to the

State Government for sanction. According to Mr. Dwivedi,

renewal of lease is a fresh one and lessor, namely the State, is

entitled to include additional terms and conditions in the said

document of lease.

26.Mr. A.K. Ganguli, learned senior counsel appearing for

the respondent, on the other hand contended that the lease

granted to the predecessor-in-interest of the respondent is

statutory lease governed by the Act and the Rules made

thereunder and unless and until the amendments brought in

22

Page 23 by the notification dated 1.6.1994 and incorporated in Form 1,

salami cannot be realised. According to the learned counsel,

the respondent-Company came into existence much before the

transfer of the leasehold interest, by virtue of amalgamation

and the order passed by the High Court in the Company

Petition. According to Mr. Ganguli, the respondent is in the

nature of joint venture Company. Learned senior counsel

relied upon decision of this Court in the case of New Horizons

Ltd. vs. Union of India (1995) 1 SCC 478 and in the case of

State of U.P. vs. Lalji Tandon, (2004) 1 SCC 1.

27.Perusal of the impugned order passed by the High Court

would show that although the High Court took notice of clause

16(a) of the lease deed and amendment brought in the

Schedule F and Form 1 of the Rules it came to the following

conclusion:

“22.1. These terms of renewal are clear and

unambiguous and these are terms exactly,

which is provided in Schedule "F" Form-I of the

WBEA Rules. In terms of the conditions

23

Page 24 contained in Clause 16(a), the State

Government/lessor was entitled to incorporate

additional terms and conditions consistent with

the law regulating the lease with prospective

effect in the renewed lease. This lease was

granted in terms of Rule 4 of the WBEA Rules in

terms of Schedule "F" in Form-I. The State is

entitled only to incorporate additional conditions

in the renewed lease with prospective effect.

Therefore, the amendment, if any, incorporated

in Schedule "F" by reason of the amendment

effective from 1st of June, 1994 would not be

effective in respect of unexpired period of the

lease to which the Darjeeling Dooars had

stepped into. Therefore, under Clause 16(a) read

with Schedule "F", Darjeeling Dooars was

entitled to renewal of the lease on the same

terms and conditions. The amendment brought

about could not be given retrospective effect to

affect the right of the lessee/transferee stepping

into the shoes of the transferor-lessee to obtain

further renewal of the lease for further period of

30 years and to successive renewals for similar

periods. The only liberty the State Government

had under the said clause is that it can impose

and include in the said renewed lease additional

terms and conditions not inconsistent with Rule

4 Schedule "F" and Form-I of the WBEA Rules

without retrospective effect.

22.2. Therefore, the amendment brought about

in Schedule "F" could be incorporated in the

renewed lease and was so rightly incorporated in

the 1998 lease. As such the conditions so

incorporated became part of the renewed lease

and would govern the terms and conditions of

the renewed lease and that too prospectively.

These additional terms and conditions

incorporated in the renewed lease became

effective after the lease was renewed, namely

when the right to renew the lease was exercised

and upon such exercise the right came to an end

and the renewal of the lease being a fresh lease,

24

Page 25 these terms cannot operate to affect a situation

prior to the renewal of the lease. In terms of

these additional conditions, the salami is

payable in consideration of the renewal after the

expiry of the renewed lease containing the

terms. A term, which was not in existence in the

lease sought to be renewed within the scope of

Clause 16(a), could not govern the right of the

lessee to obtain renewal of the right or the State

to impose conditions for renewal on the basis of

Clause 16(a) of the 1975 lease, as was held in

Delhi Development Authority v. Durga Chand

Kaushish [1974] 1 SCR 535 .

xxxxxxxxxx

22.4. The amendment also does not provide that

the amended clauses would have retrospective

operation. In any event, the terms of the lease

cannot be substituted even by legislation. No

vested right, particularly, in respect of fiscal or

revenue matters already accrued could be taken

away through legislation; neither any legislation

in that respect could be retrospective in

operation.

Conclusion:

23. In these circumstances, the additional terms

contained in the renewed lease would be

effective at the time of renewal of the renewed

lease entitling the State of demand salami in

terms of Clause 1B from the transferee if there is

any transfer. However, salami can be demanded

by the State under Clause 1A upon

determination of the lease from the person to

whom the fresh lease is granted after the 1994

Amendment of the WBEA Rules even if Clause

1A was not incorporated in the lease

determined.

25

Page 26 23.1. In these circumstances, the Government is

not entitled to demand salami in terms of

Clauses 1A or 1B incorporated in the renewed

lease as a consideration for the 1998 renewal

from the Darjeeling Dooars. Such a demand is

inconsistent with the law regulating such lease

and cannot be retrospective in effect.”

28.We have given our anxious consideration to the

reasoning assigned by the High Court while arriving at such

conclusion. In our view, the High Court has misconstrued

and misinterpreted the relevant provisions contained in the

Rules viz-a-viz the condition of renewal as contained in clause

16(a) of the lease deed. The High Court has committed error

of law in holding that the amendment brought about could

not be given retrospective effect to affect the right of the

lessee/transferee stepping into the shoes of the

transferee/lessee to obtain further renewal of lease for a

further period of 30 years and to successive renewals for

similar periods. The High Court is not correct in law in

holding that the amended clause would have retrospective

operation.

26

Page 27 29.Indisputably, the renewal of lease is a fresh grant where

the principal lease executed between the parties containing a

clause that the lease shall have to be renewed by giving a

fresh grant in accordance with the said clause. In the instant

case, as per clause 16(a) of the earlier lease deed, the lease is

to be renewed for a further period of 30 years but subject to

the rules and the terms and conditions of the lease and also

such other terms and conditions as the State Government

may from time to time consider it necessary to impose and

include in such renewed lease. Clause 16(a) further provides

that additional terms and conditions that may be considered

necessary by the State Government be included but the same

shall not be inconsistent with the law renewing such lease

and shall not have retrospective effect.

30.As noticed above, the State Government by notification

dated 1.6.1994 brought amendment in the Rules by

27

Page 28 incorporating two more conditions i.e. paragraph 1A and 1B.

As per the additional condition, in case of fresh lease granted

by the State in respect of tea garden, the lessee shall be liable

to pay salami at the rate of Rs. 15,000/- per hectare of the

land leased out. However, paragraph 1-B made it clear that

in case of transfer of leasehold interest, the transferee shall

not be liable to pay salami during the unexpired period of

lease, but after the expiry of the existing period of lease the

transferee shall be liable to pay salami at the rate of Rs.

15,000/- per hectare before the lease is further renewed.

31.Admittedly, before the expiry of the lease in question in

1998, the respondent/transferee stepped into the shoes of the

original lessee in the year 1990. In 1994, by notification

dated 1.6.1994, an amendment was brought in Schedule F of

the Rules, as discussed hereinabove, in terms of clause I-B.

Therefore, the respondent shall not be liable to pay salami

during the unexpired period of lease up to 1998. The State

Government has rightly not made any claim for salami for the

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Page 29 unexpired period of lease, but for the fresh renewal of lease

after 1998 which is a fresh grant. The demand of salami by

State Government for according sanction for renewal of lease

cannot and shall not by any stretch of imagination be held to

be retrospective.

32. In the case of State of U.P. vs. Lalji Tandon, (2004) 1

SCC 1, this Court while considering the renewal clause in the

lease deed observed:-

“13. In India, a lease may be in perpetuity.

Neither the Transfer of Property Act nor the

general law abhors a lease in perpetuity. (Mulla

on the Transfer of Property Act, 9th Edn., 1999,

p. 1011.) Where a covenant for renewal exists,

its exercise is, of course, a unilateral act of the

lessee, and the consent of the lessor is

unnecessary. (Baker v. Merckel, also Mulla, ibid.,

p.1204.) Where the principal lease executed

between the parties containing a covenant for

renewal, is renewed in accordance with the said

covenant, whether the renewed lease shall also

contain similar clause for renewal depends on

the facts and circumstances of each case, regard

being had to the intention of the parties as

displayed in the original covenant for renewal

and the surrounding circumstances. There is a

difference between an extension of lease in

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Page 30 accordance with the covenant in that regard

contained in the principal lease and renewal of

lease, again in accordance with the covenant for

renewal contained in the original lease. In the

case of extension it is not necessary to have a

fresh deed of lease executed, as the extension of

lease for the term agreed upon shall be a

necessary consequence of the clause for

extension. However, option for renewal

consistently with the covenant for renewal has

to be exercised consistently with the terms

thereof and, if exercised, a fresh deed of lease

shall have to be executed between the parties.

Failing the execution of a fresh deed of lease,

another lease for a fixed term shall not come

into existence though the principal lease in spite

of the expiry of the term thereof may continue

by holding over for year by year or month by

month, as the case may be.”

33.In the case of Gajraj Singh & ors. vs. State Transport

Appellate Tribunal & ors., (1997) 1 SCC 650, this Court

while considering the term renewal of lease or licence

contained in document, observed that “grant of renewal is a

fresh grant though it breathes life into the operation of the

previous lease or licence granted as per existing appropriate

provisions of the Act, rules or orders or acts intra vires or as

per the law in operation as on the date of renewal”.

30

Page 31 34.In the case of M.C. Mehta vs. Union of India & ors.,

(2004) 12 SCC 118, a Division Bench of this Court was

considering the question as to the effect of notification in such

case where the lessee claims renewal of mining lease. Some

of the leases were granted for extraction of minerals. In the

mean time, the notification dated 27.1.1994 was issued by

Ministry of Environment and Forest, Government of India in

exercise of power conferred by Environment (Protection) Act,

1986 putting a restriction to the grant of mining lease without

the clearance of the State Government in accordance with the

procedure specified in the notification. Rejecting the

contention made by the lessee this Court observed:-

“77. We are unable to accept the contention that

the notification dated 27-1-1994 would not

apply to leases which come up for consideration

for renewal after issue of the notification. The

notification mandates that the mining operation

shall not be undertaken in any part of India

unless environmental clearance by the Central

Government has been accorded. The clearance

under the notification is valid for a period of five

years. In none of the leases the requirements of

the notification were complied with either at the

stage of initial grant of the mining lease or at the

stage of renewal. Some of the leases were fresh

leases granted after issue of the notification.

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Page 32 Some were cases of renewal. No mining

operation can commence without obtaining

environmental impact assessment in terms of

the notification.”

35. Considering the entire facts of the case and the law

discussed hereinabove, we are of the definite opinion that the

respondent Darjeeling Dooars Plantations (Tea) Ltd. is liable to

pay salami which is one of the conditions of the Rules for the

purpose of renewal of lease. The demand made by the

Collector is fully justified. The impugned order passed by the

High Court, therefore, cannot be sustained in law.

Civil Appeal No.2548 of 2006

(State of West Bengal and others vs. Calcutta Mineral Supply

Co. Pvt. Ltd. and another)

36.We have heard Mr. Rakesh Dwivedi, learned senior

counsel appearing for the appellant-State and also Mr.

Jaideep Gupta, learned senior counsel appearing for the

respondent-company. In this case, indisputably the

respondent was in possession of the land measuring about

4.54 acres comprised in a factory or mill together with

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Page 33 structures when WBEA Act came into force in 1954. After the

said Act of 1953 came into effect, the company was allowed to

retain all the lands comprised in the factory by the

respondent by reason of Section 6(1)(g) read with Section 6(3)

of the Act as the State Government was of the opinion that

the Company required all the lands for the purpose of the

factory. It is also not in dispute that at all point of time the

respondent-company was holding the land of factory within

the ceiling limit as provided under the WBEA Act and West

Bengal Land Reforms Act.

37.Mr. Gupta, learned senior counsel, rightly submitted

that after coming into effect of the aforesaid Act no order was

passed by the concerned authority against the respondent

since the land held by it was well within the ceiling limit. The

High Court, while considering the case of the respondent,

came to the following conclusion:

33

Page 34 “28. Once the WBLR Act becomes effective and a

person becomes a raiyat within the meaning of

Section 4 thereof, he cannot have dual

characteristic, one under the WBEA Act and the

other under the WBLR Act. It is not at the

convenience or whims of the State that it will

resort to the provisions of the one or the other

Act according to its own convenience. The law is

governed by the statute. There is no scope of

arbitrariness or whims or caprice in the exercise

of power or discretion, left with the State to treat

a raiyat in a manner that suits the State

according to its own convenience. It is only

Section 14Z, which governs the field and to

which the State can resort to. The whole exercise

of the power under the WBEA Act in this case is

wholly without jurisdiction and the exercise can

no more encroach upon the field governed by

Section 14Z of the WBLR Act.

28.1. In this case, admittedly, the writ petitioner

held land comprised in mill and factory

measuring about 4.54 acres, which is well

within the ceiling both under the WBEA Act and

WBLR Act. Therefore, retention of the land

under Section 6(1) could not be subjected to

Section 6(3) of the WBEA Act, which applies in

respect of land held in excess of the ceiling.

Similarly, Section 14Z(2) of the WBLR Act

applies to land held by a raiyat in excess of the

ceiling. Once the writ petitioner became a raiyat

by virtue of operation of Section 3A read with

Section 4 along with the amendment of the

definition of land in Section 2(7) of the WBLR Act

with heritable and transferable right in respect

of land held by him within the ceiling, there is

no scope for application of Section 14Z(2) of that

Act.

Order:

29. Therefore, the order passed by the Deputy

Secretary/Special Secretary on 20th of July,

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Page 35 2001 (pp. 65-78) upholding the notice and the

notice dated 10th of August, 2001 (pp. 76-77)

issued by the Sub-Divisional Land and Land

Reforms Officer, Barrackpore, for enquiry and

possession pursuant thereto and the order dated

18th January, 2001 passed by the learned

Tribunal affirming the order passed by the

Deputy Secretary being subject-matter of this

writ petition cannot be sustained and are hereby

quashed. Let a writ of certiorari do issue

accordingly.”

38.Having regard to the facts of the case of the respondent

and also regard being had to the fact that the respondent at

all point of time held the land within the ceiling limit, the

High Court rightly set aside order dated 29

th

July, 2011

passed by the Special Secretary upholding the notice issued

by the Sub-Divisional, Land and Land Reforms Officer.

Therefore, we do not find any reason to interfere with the

order passed by the High Court so far this case is concerned.

39.For the reasons aforesaid, Civil Appeal No.2549 of 2006

(Collector, Jalpaiguri and another vs. Darjeeling Dooars

Plantations (Tea) Ltd. and another) is allowed and the

35

Page 36 judgment and order passed by the High Court, in W.P.L.R.T.

No.288 of 2005, is set aside. Whereas Civil Appeal No.2548 of

2006 (State of West Bengal and others vs. Calcutta Mineral

Supply Co. Pvt. Ltd. and another) is dismissed. However, there

shall be no order as to costs.

…………………………… .J.

(M.Y. Eqbal)

…………………………… .J.

(Amitava Roy)

New Delhi

May 06, 2015

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