No Acts & Articles mentioned in this case
2025 INSC 36 CIVIL APPEAL NO.6667 OF 2023 Page 1 of 81
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6667 OF 2023
THE MUNICIPAL CORPORATION
OF GREATER MUMBAI & ORS. …APPELLANTS
VERSUS
CENTURY TEXTILES AND
INDUSTRIES LIMITED & ORS. …RESPONDENTS
J U D G M E N T
VIKRAM NATH, J.
1. The Municipal Corporation of Greater Mumbai
1 and
its officers have filed this appeal assailing the
correctness of judgment and order dated 14.03.2022
passed by the Bombay High Court allowing the Writ
Petition No. 295 of 2017 filed by the Respondent No.1
directing the appellant (Respondent No.1 therein) to
execute formal conveyance of plot bearing C .S.
No.1546 of Lower Parel Division, Mumbai in favour of
1
MCGM
CIVIL APPEAL NO.6667 OF 2023 Page 2 of 81
the Respondent No.1 (Petitioner no.1 therein) within
a period of eight weeks.
2. Brief facts giving rise to the present appeal are
summarised hereunder:
2.1. Century Textiles and Industries Limited
(Respondent No.1) is a company incorporated
under the Companies Act running a cotton
mill. Under the provisions of the City of
Bombay Improvement Act, 1898
2,
Respondent No.1 applied to the Improvement
Trust under Section 32B thereof under the
Poorer Classes Accommodation Scheme (in
short, “PCAS”) to provide dwellings to the
poorer class workers. The said application
was filed on 12.04.1918.
2.2. The Improvement Trust Board , vide
Resolution no. 121, in its meeting dated
16.04.1918, approved the PCAS of the
Respondent No.1 which provided for
construction of 44 Blocks of poorer class
dwellings containing a total of 980 rooms and
20 shops as a pre-condition for execution of
2
The 1898 Act
CIVIL APPEAL NO.6667 OF 2023 Page 3 of 81
the lease under Section 32G of the 1898 Act
(as amended in 1913), with other
consequences to follow.
2.3. It would be worthwhile to mention here that
the construction was to take place on a piece
of land measuring 50,000 sq. yds. sub-
divided into three plots A, B and C. However,
at present, the dispute relates only to plot A
admeasuring 23,000 sq. yds.
2.4. The above scheme, as approved by the Board,
was duly notified on 01.05.1918 as Scheme
No. 51. The Special Collector handed over the
charge of the property/plot bearing C.S. No.
1546 of Lower Parel Division to the
Improvement Trust, pursuant to the aforesaid
Resolution No. 121 and the notification of
Scheme No. 51, sometime in August, 1919.
The possession of the said plot was, later on,
handed over by the Improvement Trust to the
Respondent No.1, whereupon, they started
the construction and constructed 476
dwellings and 10 shops till the year 1925, as
a part of the pre-condition for execution of
lease under Section 32G of the 1898 Act.
CIVIL APPEAL NO.6667 OF 2023 Page 4 of 81
2.5. In the year 1925, the 1898 Act was repealed
by The Bombay Improvement Trust Transfer
Act, 1925
3. On 10.03.1927, Respondent No.1
applied to the Improvement Trust under
Section 37(2) of the 1925 Act for alteration of
the notified Scheme No. 51. Again, on
20.05.1927, Respondent No.1, through their
solicitors M/s C.N. Wadia and Co mpany
applied to the Improvement s Committee
making the same request for modification of
the notified Scheme No. 51 requesting the
committee to accept the 476 rooms instead of
980 rooms and 10 shops instead of 20 shops,
as required under the notified scheme. The
Improvement Trust/Board, vide Resolution
No. 325 dated 31.05.1927, granted alteration
of the notified Scheme No. 51. According to
the said resolution, Block-B and Block-C
would be excluded from Estate Agent’s plan,
lease of Block-A for a period of 28 years to be
granted to the company on the terms
3
The 1925 Act
CIVIL APPEAL NO.6667 OF 2023 Page 5 of 81
mentioned in paragraphs 2 and 4 of the letter
dated 20.05.1927, Block-B to be conveyed to
the Respondent No.1 on terms and conditions
stated in paragraph 5 of the letter dated
20.05.1927 and Block -C to remain the
property of the Improvement Trust/Board.
2.6. Pursuant to the said Resolution No. 325,
Block-B was conveyed to the Respondent No.1
on 10.01.1928 for which the Respondent No.1
paid Rs.1,20,000/- as sale consideration.
2.7. Later on, a lease was granted by the Board in
favour of Respondent No.1 on 03.10.1928
with respect to Block-A, which included both
the land and buildings for a period of 28 years
w.e.f. 01.04.1927 at a yearly rent of Rupee
One. The lease was to expire on 31.03.1955
i.e. on completion of 28 years. The
Respondent No.1 also paid the expenses of
acquisition which had been incurred by the
Board.
2.8. For a period of 51 years, neither the appellant
nor the Respondent No.1 initiated any
proceedings against each other - the
Respondent No.1 for getting the conveyance
CIVIL APPEAL NO.6667 OF 2023 Page 6 of 81
executed, as is being claimed now, and the
appellant for eviction of the Respondent No.1
as the lease period had expired. The fact
remains that the Respondent No.1 has
continued in possession of the land and
buildings comprised in Block-A.
2.9. The Respondent No.1, on 14.08.2006, served
a legal notice under Section 527 of the
Mumbai Municipal Corporation Act, 1888
4 on
the appellant stating that as per the lease
agreement, after expiry of lease period of 28
years, the said property ought to be conveyed
to the Respondent No.1 and, on failure to do
so within the specified period, the Respondent
No.1 would be constrained to file a suit.
However, no suit was ever filed by the
Respondent No.1.
2.10. In 2009, an application was filed by the
Respondent No.1 for redevelopment of the
land in question to the appellant as ,
according to the Respondent No.1, they had
closed the mill in 2008 and they wanted to
4
The 1888 Act
CIVIL APPEAL NO.6667 OF 2023 Page 7 of 81
shift the mill industry out of the land in
question.
2.11. Another communication dated 21.04.2009
was sent by the Respondent No.1 to the
appellant, requesting for conveyance of Block-
A as per the lease deed. The MCGM
apparently approved an integrated
development scheme on 17.03.2011 with
respect to Block-A Plot bearing C.S. No.1546.
The Assistant Commissioner (Estate) of the
appellant was of the opinion that Block-A
should not be conveyed to the Respondent
No.1 which is apparent from the internal
report dated 17.06.2013.
2.12. A meeting between the parties was held in
March, 2014 after which, once again, the
Respondent No.1 requested, vide letter dated
27.03.2014, to execute a formal deed of
conveyance. The Respondent No.1, vide letter
dated 30.11.2016, again called upon the
appellant to execute a formal deed of
conveyance in view of Section 51(2) of the
1925 Act. When no action was taken by the
appellant, the Respondent No.1 filed writ
CIVIL APPEAL NO.6667 OF 2023 Page 8 of 81
petition before the Bombay High Court in
December, 2016 which was registered as W.P.
No. 295 of 2017. The reliefs claimed by means
of the said petition are reproduced hereunder:
“29. …The Petitioners therefore pray:
a) For a Writ of mandamus or a writ in
the nature of mandamus or for any
appropriate writ, order or direction
ordering and directing Respondent Nos.
1 and 2 (and their servants, officers and
agents) to recognize and proceed on the
basis that the said Premises being plot
bearing C.S.No.1546 of L ower Parel
Division and the buildings standing
thereon vest in Petitioner No. 1 by virtue
of the provisions of the Improvement
Acts and as the absolute owners thereof.
b) For a writ of mandamus or a writ in
the nature of mandamus or any other
appropriate writ, order or direction
under Article 226 of the Constitution of
India ordering and directing the
Respondent No.1 (and its servants,
officers and agents) to do all such acts
and things as may be necessary for
formalizing the vesting of the said
Premises in Petitioner No.1 herein
including by executing and thereafter
registering with the Sub Registrar of
Assurances a Deed of Conveyance of the
said Premises.
c) For a writ of mandamus or a writ in
the nature of mandamus or any other
appropriate writ, order or directions
CIVIL APPEAL NO.6667 OF 2023 Page 9 of 81
under Article 226 of the Constitution of
India ordering and directing the
Respondent No.2 (and its servants,
officers and agents) to do all such acts
and things as may be necessary for
reflecting the name of Petitioner No.1 in
the records of the Collector of Mumbai in
respect of the said plot of land bearing
C. S. No. 1546 of Lower Parel Division;
d) That pending the hearing and final
disposal of this Petition this Hon'ble
Court be pleased to direct the
Respondents by themselves their
servants, agents, officers and sub -
ordinates to consider all applications
from Petitioner No.1 as emanating from
the owner of the said Premises and deal
with them in all matters relating to the
said Premises as if Petitioner No.1 were
the owner thereof.
e) for ad-interim reliefs in terms of
prayer (d) above;
f) for costs of this Petition; and
g) for such other and further relief as the
nature and circumstances of the case
may require be passed.”
2.13. During the pendency of the petition, the
Respondent No.1 moved two amendments to
the writ petition. The first one in June, 2017,
challenging the Directions note prepared on
the internal file of the appellant
CIVIL APPEAL NO.6667 OF 2023 Page 10 of 81
recommending to stop the ongoing work and
the approval granted under the integrated
scheme to be recalled and cancelled. Further
relief seeking ad interim relief against the said
action was also sought.
2.14. The appellant issued a show cause notice
dated 28.03.2018 as to why the amended IDS
lay out should not exclude Block-A Plot
bearing C.S. No.1546. Upon receipt of the said
notice, the Respondent No.1 moved the
second amendment to the writ petition to
challenge the said show cause notice. Under
orders of the Bombay High Court dated
12.04.2018, the appellant was directed not to
proceed to adjudicate on the show cause
notice until further orders.
2.15. After hearing the learned counsel for the
parties and based on material on record, the
High Court by the impugned judgment dated
14.03.2022, allowed the writ petition and
issued appropriate directions to the appellant
to execute the conveyance of the plot in
question. Aggrieved by the same, MCGM is in
appeal. While issuing notice dated
CIVIL APPEAL NO.6667 OF 2023 Page 11 of 81
13.07.2022, this Court granted an order of
status quo to be maintained by the parties.
Pleadings have been exchanged.
3. We have heard Shri Dhruv Mehta and Shri Neeraj
Kishan Kaul, learned senior counsels for the
appellants; Shri Darius J. Khambatta, Shri Ranjit
Kumar and Shri Shyam Divan, learned senior
counsels appearing for the respondents and, also
perused the material on record.
4. The submissions of the learned counsels appearing
for the appellants are briefly summarized hereunder:
A. Delay and Laches in filing the Writ Petition
5. The term of the lease dated 03.10.1928 in favour of
the Respondent No.1 expired on 31.03.1955.
According to the Respondent No.1, it was purportedly
entitled to a deed of conveyance on expiry of the
aforesaid period. As such, the cause of action would
arise immediately after the expiry of the term of the
lease. Respondent No.1 took no legal action before
any court of law, right from 1955 till the end of 2016
i.e. for 61 years when it filed the writ petition before
the High Court on 23.12.2016. Thus, it was
submitted that the petition was highly barred by
CIVIL APPEAL NO.6667 OF 2023 Page 12 of 81
laches and ought to have been dismissed on such
grounds.
6. It was also submitted that in 2006, a legal notice
dated 14.08.2006 under Section 527 of the 1888 Act
was issued by Respondent No.1, requiring the
appellant to execute the conveyance deed. The
limitation provided for filing a suit under Section
527 of the 1888 Act is six months. But Respondent
No.1 took no action thereafter for more than 10
years. No suit was ever filed by the Respondent No.1.
Knowing fully well that the limitation under Section
527 of the 1888 Act had expired long back, they
chose to file the writ petition in December, 2016. The
submission is that preferring a writ petition could
not do away with the issue of limitation which would
arise while availing the statutory remedies available.
In such circumstances, the High Court fell in error
in entertaining the writ petition and holding that the
filing of the writ petition even after 61 years would
not suffer from delay or laches. In support of the
said submissions, the following two judgments are
relied upon:
CIVIL APPEAL NO.6667 OF 2023 Page 13 of 81
i) Shri Vallabh Glass Works Ltd. v. Union of
India
5
,
ii) SS Rathore v. State of MP
6
B. Effect of Section 51(2) read with Section 48 of the
1925 Act thereof
7. Section 51(2) which talks about default and
determination of lease uses the expression “shall
convey” that in a situation where there is no default
in complying with the obligations under the lease
document, the Board shall convey the premises in
favour of lessee on expiration of the lease. Whereas,
Section 48(a) states that the lessee would keep the
demised premises together with its fixtures in good
and substantial repair and condition during the term
of the lease and leave at the end thereof. The
submission is that while reading both the provisions
together and in order to give a harmonious
construction, the expression “shall convey” must be
read as “may convey”. It is also submitted that in case
Section 51(2) is read with the expression “shall
convey”, then the expression used in Section 48(a)
5
(1984) 3 SCC 362
6
(1989) 4 SCC 582
CIVIL APPEAL NO.6667 OF 2023 Page 14 of 81
that the lessee would leave at the end of the term of
the lease, would have no meaning and would be
rendered as otiose or superfluous. In support of the
said submissions, the following decisions are relied
upon by the appellants:
i) CIT v Hindustan Bulk Carriers
7
,
ii) Sultana Begum v. Prem Chand Jain
8
,
iii) Sainik Motors v. State of Rajasthan
9
C. Concept of contracting out of the obligations and
waiving of the statutory rights by either of the
parties to a contract.
8. Highlighting the concept of contracting out of
obligations arising out of a contract and waiving the
statutory rights, it has been submitted that by now,
it is well-settled that the party can legally do so and
such principle has been duly recognised by this
Court in the following decisions:
i) Lachoo Mal vs. Radhey Shyam
10
ii) Sita Ram Gupta v. Punjab National Bank
11
iii) HR Basavaraj v. Canara Bank
12
7
(2003) 3 SCC 57
8
(1997) 1 SCC 373
9
(1962) 1 SCR 517
10
(1971) 1 SCC 619
11
(2008) 5 SCC 711
12
(2010) 12 SCC 458
CIVIL APPEAL NO.6667 OF 2023 Page 15 of 81
The appellants would be entitled to the benefit of said
concept in the facts and circumstances of the case.
D. Misreading by the High Court
9. According to the appellant, the High Court committed
serious error by misreading some of the relevant
documents and reading something which is not
stated in such documents. Details of the same would
be discussed while analysing the said arguments.
However, in particular, we may note that the
pleadings have referred to the Resolution of the Board
dated 31.05.1927 as having been misread and
secondly the lease deed dated 03.10.1928 as also
having been misread.
E. Relevancy of the internal notings and
communications inter se officers of the
Corporations
10. The submission is that until and unless the order is
approved by the Competent Authority of the
Corporation and issued by its Authorised Officer,
Respondent No.1 could not derive any advantage of
any internal noting or communications of the
Corporation. The High Court committed error in
relying upon such noting and internal
communications without there being a decision of the
CIVIL APPEAL NO.6667 OF 2023 Page 16 of 81
Competent Authority duly communicated to the
parties. In support of the said submissions, reliance
is placed upon the judgment in the case of Shanti
Sports Club vs. Union of India
13.
F. No legal rights accrued to the Respondent No.1 for
vesting of lease/conveyance of Block-A in terms
of the 1925 Act
11. The 1925 Act replaced the 1898 Act, which stood
repealed. Referring to the Section 32I(2) of the 1898
Act which stood replaced by Section 51 of the 1925
Act, it was argued that under the 1898 Act, it was
mentioned that where no default is made in the
conditions of the lease, then on determination of the
lease, all the right, title, and interest of the Board
shall vest in the employer free from all liabilities.
Whereas, under Section 51 of the 1925 Act, under
sub-Section (1) on default being made, the Board had
the right to re-enter, and under sub-Section (2),
where no default is made, then on determination of
the lease, the Board shall convey the premises to the
lessee at his cost and free of all restrictions and
liabilities imposed under the lease. It was, thus,
13
(2009) 15 SCC 705
CIVIL APPEAL NO.6667 OF 2023 Page 17 of 81
submitted that under the 1925 Act, there was no
automatic vesting but a separate deed of conveyance
to be executed at the cost of the lessee. This is the
provision where the submission that the word “shall
convey” may be read as “may convey” read with
Section 48(a) of the 1925 Act. It was also submitted
that the word used “at his cost” in Section 51(2)
clearly meant that for a conveyance by the Board, the
lessee would be required to make a separate payment
for such a conveyance.
G. Payment of cost of Scheme does not entitle
Respondents to any rights in the land itself.
12. The claim of the Respondent No.1 that it had incurred
huge expenditure as cost of the Scheme at the time
of acquisition of the land by the Board entitled it to a
conveyance without any further payment of cost of
the land, is misplaced. The benefits admissible to the
Respondent No.1 under the lease deed were in return
of the bearing of the cost of the Scheme. It only
envisaged a lease for 28 years, subject to terms and
conditions recorded thereunder, but no conveyance.
For conveyance, separate costs were required to be
paid at the time of conveyance as per the scheme of
the 1925 Act. It was submitted that the Respondent
CIVIL APPEAL NO.6667 OF 2023 Page 18 of 81
No.1 filed writ petition only to make huge profits
under the public welfare scheme by usurping land
valued at around Rs. 1200 crores without paying a
penny.
13. On such submissions, it was prayed that the appeal
be allowed, the impugned judgement of the High
Court be set aside and the writ petition be
dismissed.
14. On the other hand, the learned senior counsels for
the Respondent No.1 prayed for dismissal of the
appeal by making the following submissions:
A. The lease confers the right to conveyance on
Respondent No.1
15. It is submitted that as the lease deed dated
03.10.1928 stated that the Board agreed to alter
Scheme No.51 ‘pursuant to the lessee’s request’, as
such, the lessee’s request which contained the
following expression ‘convey to the lessees the said
portion of land at the expiration of the said term’,
clearly indicates that the appellant was obliged to
execute the conveyance on expiration of the lease.
Even if no specific mention of the conveyance is
mentioned in the lease deed, since the appellant
agreed to alter the Scheme No. 51, they were now
CIVIL APPEAL NO.6667 OF 2023 Page 19 of 81
estopped from denying the right of Respondent No.1
to conveyance.
B. Board Resolution No. 325 and lease cannot be
used to contract out of Section 51(2) of the 1925
Act
16. The application dated 20.05.1927 submitted by
Respondent No.1 for alteration of the Scheme No.51,
is reproduced in the Board Resolution No. 325 which
accepted paragraph nos. 2 and 4 thereof. There was
no occasion for the appellant today to claim that they
have contracted out of Section 51(2) of the 1925 Act.
Neither the lease deed mentioned specifically that
they were contracting out of Section 51(2) of the 1925
Act, nor at any stage thereafter have the appellants
taken this plea of contracting out.
C. Section 108(q) of the Transfer of Property Act,
1882
17. It is submitted that the appellants never raised this
plea before the High Court relying on Section 108(q)
of the Transfer of Property Act, 1882 being expressly
excluded in the lease deed and therefore, giving them
the right to re-possession may not and should not be
entertained by this Court.
CIVIL APPEAL NO.6667 OF 2023 Page 20 of 81
D. Vesting and execution of conveyance is
mandatory and cannot be contracted out
18. The submission is that the provisions of Section 51(2)
of 1925 Act as also the provisions of Section 32I(2) of
the 1898 Act are mandatory in nature as the word
used is ‘shall’ and therefore, there is no justification
for the appellant to raise a plea of contracting out of
the terms of the lease or the statutory provisions. In
support of the said submission, t he following
judgments are relied upon:
i) Murlidhar Agarwal and Anr. v State of
Uttar Pradesh and Others
14
ii) Devkaran Nenshi Tanna v. Manharlal
Nenshi
15
iii) PTC (India) Financial Services Ltd. v
Venkateswarlu Kari
16
E. Obligations of lessee/employer, recompense and
composite nature of scheme
19. Our attention has been drawn to the Scheme as
spelled out in the 1925 Act, counsels for Respondent
No.1 referred to various provisions and have
14
(1974) 2 SCC 472
15
(1994) 5 SCC 681
16
(2022) 9 SCC 704
CIVIL APPEAL NO.6667 OF 2023 Page 21 of 81
submitted that once the lessee discharges all his
obligations, there is no reason why under the
statutory scheme, the land and building should not
be conveyed to it. It was further submitted that under
the 1925 Act, the conveyance referred to is akin to
the vesting provided under Section 32I(2) of the 1898
Act.
F. Section 51 of the 1925 Act, a special provision
prevails over Section 48(a) of the said Act which
is a general provision
20. Referring to the provision under Section 48(a) and
Section 51 of the 1925 Act, it has been vehemently
argued that Section 48, being a general provision,
deals with standard conditions of the lease to be
granted under the scheme. It only postulates that at
the end of the term of the lease, the lessee shall leave
the demised premises and their fixtures “in good and
substantial repair and condition”. It does not deal
with as to what would happen during the period of
lease where there is a default or at the end of the lease
where there has been no default. It is Section 51 of
the 1925 Act which deals with the above two
situations and, as such, this would be a special
provision. Relying upon the following two judgments,
CIVIL APPEAL NO.6667 OF 2023 Page 22 of 81
it was submitted that the special provision would
prevail over the general provision and, therefore,
there was no option but for the appellant to execute
the conveyance.
i) Managing Director Chattisgarh State Co -
operative Bank Maryadit v Zila Sahkari
Kendriya Bank Maryadit and Ors.
17
ii) J.K. Spinning and Weaving Mill Co Ltd. v
State of uttar Pradesh & Others
18
G. Meaning of the word “premises”
21. Submission on behalf of the Respondent No.1 is that
the word “premises” would include both land and
building, as defined in Section 3(gg) of the 1888 Act,
which clearly means that the word “premises” would
include both, buildings and land. Since the word
“premises” is not defined in the 1925 Act, Section 5
of the 1925 Act provides that the words used in the
1925 Act but not defined therein would have the
same meaning as it does under the 1888 Act.
H. Public-Private Partnership
22. The Scheme as envisaged under the 1898 Act and the
1925 Act was an early example of the Public-Private
17
(2020) 6 SCC 411
18
SCC Online SC 16
CIVIL APPEAL NO.6667 OF 2023 Page 23 of 81
Partnership principle, by which the Board was able
to procure private funding for purposes of providing
housing to economically weaker section of the society
in exchange for vesting or conveying the land used for
the Scheme. The Respondent No.1 having discharged
its obligations without a single default, was entitled
to the benefit of vesting/conveyance at the end of the
Scheme or the lease in the present case.
I. A vested right cannot be divested by subsequent
conduct
23. The submission is that once Respondent No.1 had a
right to conveyance at the end of the term of the lease,
and which was an indefeasible right, any amount of
delay, laches, or other conduct would not result in
divesting of such rights. Reliance was placed upon
the judgement in the case of Rameshwar and
Others vs. Jot Ram and Another
19.
J. The appellants recognized and acknowledged the
ownership rights of Respondent No.1
24. On the above aspect, the internal correspondence
and noting of the Corporation have been referred to
by the learned senior counsel at different stages,
19
(1976)1 SCC 194
CIVIL APPEAL NO.6667 OF 2023 Page 24 of 81
which shall be dealt with appropriately at a later
stage by analysing the arguments raised by both the
sides as to whether such noting and internal
communications within the Corporation could be
relied upon.
K. Alleged Delay
25. In trying to explain the delay for approaching the
Court after 61 years, it was submitted on behalf of
the Respondent No.1 that the possession of the
Respondent No.1 has continued without any
obstruction by the appellant. At no stage during this
entire period of 61 years, neither did the appellant
sought possession of the Block-A nor did they
demand any rent for the same. The Respondent No.1,
for the first time, came to know that the Assistant
Commissioner (Estate) of the appellant had issued an
opinion in June, 2013 that the premises should not
be conveyed to Respondent No.1. However, even that
opinion was never communicated to the Respondent
No.1. The High Court has dealt with this aspect of the
matter and has found that there was no delay on part
of the Respondent No.1 in approaching the Court.
CIVIL APPEAL NO.6667 OF 2023 Page 25 of 81
Reliance has been placed on the judgment in State
of Maharashtra vs. Digambar
20.
26. Before proceeding to deal with the respective
submissions, it would be appropriate to refer to the
relevant statutory provisions along with the scheme
of those enactments. The 1898 Act was promulgated
with the preamble stating inter alia improvement and
future expansion of city of Bombay by constructing
new sanitary dwellings for certain classes of
inhabitants by laying out vacant lands and by
reclaiming and laying out parts of the foreshore of the
island of Bombay.
27. In the 1898 Act, a substantial amendment came in
the year 1913 whereby Section 32B to Section 32I
were added. This is referred to as the Amendment Act
of 1913. Under the said amended provision, the
scheme had come whereby land would be acquired
by the Board constituted under the 1898 Act and,
thereafter, given out for development and
construction to private parties on such terms and
conditions as the Improvement Trust, constituted
under the 1898 Act, may determine and as also
20
(1995) 4 SCC 683
CIVIL APPEAL NO.6667 OF 2023 Page 26 of 81
spelled out in the aforesaid provisions. Sections 32B
to 32I of the 1898 Act are reproduced hereunder:
“Section 32B. Application by
employer for Poorer Classes
Accommodation Scheme: (1) Any
person employing members of the
poorer classes in the course of his
business may make an application to
the Board stating that he wishes to
provide poorer classes’ dwellings for
the use of all or some of such
members and desiring the Board to
make a scheme for such purpose.
Such person shall hereinafter be
called ‘the employer’, which term
shall include his heirs, executors,
administrators, assigns and
successors.
(2) The Board on consideration of the
said application, if they are of opinion
that it is expedient to provide the said
poorer classes’ dwellings, may pass a
resolution to that effect and proceed
to make a scheme for that purpose.
(3) The poorer classes
accommodation scheme shall provide
for –
(a) the construction of poorer classes’
dwellings
i) by the Board or
CIVIL APPEAL NO.6667 OF 2023 Page 27 of 81
ii) by the employer under the
supervision of the Board and in
accordance with plans and
specifications prepared by the Board,
and
(b) the letting on lease to the
employer of the dwellings so
constructed (hereinafter called ‘the
dwellings’).
(4) Such scheme may provide for all
matters incidental to the scheme,
including the acquisition, raising,
lowering or levelling of land required
for the execution of the scheme and
the construction of accessory
dwellings of any description that may
be necessary for the purposes of the
scheme.
Section 32C – Land on which
dwellings may be constructed: The
Poorer Classes accommodation
scheme may provide for the
construction of the dwellings on
land:-
a) acquired by the Board or vesting
in the Board either absolutely or for
sufficient number of years or
CIVIL APPEAL NO.6667 OF 2023 Page 28 of 81
b) vesting in the employer either
absolutely or for a sufficient number
of years;
Provided that the scheme shall not
provide for the construction of
dwellings on land alleged to vest in
the employer until the employer has
proved to the satisfaction of the Board
that he has such title to the land as
shall be good and sufficient for the
purposes of the scheme.
Section 32D . Procedure on
completion of scheme: Upon the
completion of a poorer classes
accommodation scheme, the
provisions of sections 27, 28 and 29
shall, with all necessary
modifications, be applicable to the
scheme in the same manner as if the
scheme were an improvement
scheme.
Section 32E: Procedure when
dwellings are to be constructed on
Schedule C or D land: When such
scheme provides for the construction
of dwellings upon lands forming part
of any of the lands specified in
Schedule C or Schedule D
Government or the Corporation, as
the case may be, shall, on the scheme
being sanctioned, forthwith resume
CIVIL APPEAL NO.6667 OF 2023 Page 29 of 81
the land. The Board shall thereupon
pay in cash to Government or to the
Corporation, as the case may be, a
sum equal to the market value of the
land as determined by the Collector
under the Land Acquisition Act,
1894; and such sum shall be deemed
to be part of the cost of the scheme to
the Board. The land shall thereupon
vest in the Board.
Section 32F.- Deposit and Notice:
(1) The construction of dwellings shall
not be commenced:-
a) where the land vests in or is
acquired by the Board, until the
employer has deposited with the
Board as security a sum equal to
twenty percent of the cost of the
scheme ;
b) where the land vests in the
employer, until the employer has
submitted to the Board a proposal
that the land shall be transferred to
the Board for the purpose of Poorer
Classes Accommodation Scheme and
until the board shall have served a
notice in writing upon the employer
signifying their acceptance of such
proposal; provided further that if in
the opinion of the Board the value of
the land falls short of twenty percent
of the estimated cost of the scheme,
CIVIL APPEAL NO.6667 OF 2023 Page 30 of 81
the shortage shall be made good by a
deposit in cash or securities.
(2) On the service upon the employer
of the notice referred to in sub-section
(1), clause (b), all the estate, right,
title and interest of the employer in
and to the land referred to in the
proposal shall forthwith vest in the
Board.
(3) The employer shall be entitled to
the gradual refund of his deposit by
annual payments equal to the annual
Sinking Fund Charges on all moneys
spent by the Board on the scheme,
which shall be calculated in the
manner described in sub-section (2)
of section 32G.
Section 32G.- Term of lease and
amount of rent: (1) The Board shall
proceed with the Scheme and on
completion of the building shall lease
the same with the site to the employer
for 28 years.
(2) The lessee shall during the said
term pay to the Board as annual rent
a sum equal to the total of –
(a) the annual interest payable by the
Board on all moneys which they have
spent on the scheme, and
CIVIL APPEAL NO.6667 OF 2023 Page 31 of 81
(b) Sinking Fund charges so
calculated that at the end of the term
of the lease the aggregate in the
Sinking Fund shall amount to the
total sum spent on the scheme.
Such total sum shall include –
(i) all moneys spent on Interest and
Sinking Fund Charges up to the date
of the commencement of the lease,
(ii) if and so far as the land included
in the scheme has not been provided
by the employer, the cost of such
land,
(iii) preliminary expenses and an
allowance for management and
supervision up to the date of the
commencement of the lease.
(3) The cost of such land for the
purposes of this section shall be
deemed to be –
(a) if and so far as the land has been
acquired for the scheme, the actual
cost of its acquisition;
(b) if and so far as the land is vested
in the Board as being part of the
lands specified in Schedule C or
Schedule D, the sum paid by the
Board under section 32C;
CIVIL APPEAL NO.6667 OF 2023 Page 32 of 81
(c) in all other cases the market value
of the land at the date of the
declaration of the scheme.
Section 32H.- Provisions as to
lease: (1) Every lease under a poorer
classes accommodation scheme shall
commence from such date
subsequent to the completion of the
dwellings as may be fixed by the
Board.
(2) The following conditions shall be
expressed or implied in every lease,
namely:-
a) that the lessee shall be liable for
repairs and insurance;
b) that the lessee shall be liable for
the payment of all rates and taxes;
c) that the lessee shall sub-let the
dwellings (except such portions
thereof as contain shops, care-takers’
quarters and the like) only to persons
employed by him in the course of his
business or their families except in so
far as there may not be sufficient
numbers of such persons willing to
occupy the dwellings and in any case
only to members of the poorer
classes;
CIVIL APPEAL NO.6667 OF 2023 Page 33 of 81
d) that the lessee shall not demand or
receive in respect of any room or
tenement in the dwellings any rent in
excess of the amount fixed as next
hereinafter provided;
e) That the maximum rent of each
room or tenement in the dwellings
(except such portions thereof as
contain shops and the like as
hereinbefore set out) shall be fixed by
the Board after consulting the lessee
and that such maximum rent shall be
written or painted up by the lessee in
a conspicuous position in each such
room or tenement. Such maximum
rent shall not be subject to alteration
save with the consent of the Board.
Section 32I. - Default and
determination of lease (1)(a) On
default being made by the lessee in
any of the conditions of the lease, all
the right, title and interest of the
employer to the dwellings and in and
to the land on which the dwellings are
constructed and any deposit or other
moneys paid by the employer to the
Board whether before or after the
commencement of the lease shall be
dealt with in the following manner: -
i) The deposit by the employer shall
be credited to the Board, and
CIVIL APPEAL NO.6667 OF 2023 Page 34 of 81
ii) The Board shall put the said right,
title and interest of the employer to
the auction.
(b) The Board shall then have the
option either of transferring the right,
title and interest to the highest bidder
at the auction or of themselves taking
over the right, title and interest on
payment to the employer of the
highest sum bid at the auction.
(c) If no sum is bid at the auction but
some person is willing to take over the
right, title and interest, on receiving
payment of any sum, the Board shall
have the option either of making such
payment and transferring the right,
title and interest to that person or of
themselves taking it over. The Board
shall be entitled to recover the sum in
question from the defaulting lessee
for non-fulfilment of the contract.
(d) If no sum is bid at the auction but
some person is willing to take over the
right, title and interest without either
paying or receiving payment of any
sum, the Board shall have the option
either of transferring the right, title
and interest to that person or of
themselves taking it over without
either receipt or payment of any sum.
CIVIL APPEAL NO.6667 OF 2023 Page 35 of 81
(2) Where no default is made in the
conditions of the lease, then on the
determination of the lease all the
right, title and interest of the Board in
and to the dwellings and in and to the
land on which the dwellings are
constructed shall vest in the
employer free from all liabilities
created by this Act.”
28. In the meantime, the 1925 Act was promulgated
which replaced the 1898 Act. Under this Act, the
powers conferred upon the Board of Trustees under
the 1898 Act were to be transferred to the appellant-
Corporation and this Act further postulates that its
purpose was to improve the city of Bombay by
constructing new sanitary dwellings for certain
classes. Section 48 of the 1925 Act provided for lease
conditions. Section 51 provided for dealing with the
lessee where he committed default in the terms and
conditions by way of a right of re-entry to the
Corporation and further, if there is no default on the
part of lessee, it would have a right of conveyance in
favour of the lessee at his cost. Sections 48 to 51 of
the 1925 Act are reproduced hereunder:
“48. The lease shall commence from
such date subsequent to the
completion of the execution of the
CIVIL APPEAL NO.6667 OF 2023 Page 36 of 81
scheme as may be fixed by the
Committee and shall be subject to the
following among other conditions: -
(a) The lessee shall keep during the
term of the lease and leave at the end
thereof the demised premises
together with their fixtures in good
and substantial repair and condition.
(b) The lessee shall insure the
demised premises against loss or
damage by fire.
(c) The lessee shall be liable for the
payment of all rates and taxes.
(d) The lessee shall sublet the rooms
and tenements prescribed by the
Committee to be used as dwellings
only to persons employed by him in
the course of his business or their
families except in so far as there may
not be sufficient numbers of such
persons willing to occupy the same
and in any case only to members of
the poorer classes. No such room or
tenement shall be used otherwise
than as a dwelling except with the
previous consent in writing of the
Committee.
(e) The maximum rent of each room
or tenement shall be fixed by the
Committee after consulting the lessee
and such maximum rent shall be
CIVIL APPEAL NO.6667 OF 2023 Page 37 of 81
written or painted up by the lessee in
a conspicuous position in each such
room or tenement. Such maximum
rent shall not be subject to
alternation save with the consent of
the Committee.
(f) The lessee shall not demand or
receive in respect of any such room or
tenement any premium or any rent in
excess of the maximum rent fixed and
in force for the time being.
(g) The lessee shall not assign or
sublet the demised premises or any
part thereof without the previous
consent in writing of the Committee.
Any assignee or sub-lessee shall be
bound by the conditions contained in
this Act and in the lease.
49. Lessee may commute the rent:
The lessee may at any time with the
consent of the Committee commute
the rent payable under the lease and
in such event the rent shall be Rs.1
per annum for the remainder of the
term.
50. Lessee not to make alterations
so as to reduce the
accommodation: The Committee
shall not without the previous
sanction of the Board and of
Government permit the lessee to
make any substantial variation in the
CIVIL APPEAL NO.6667 OF 2023 Page 38 of 81
user of the premises so as to reduce
the accommodation prescribed by the
Committee to be used as dwellings.
51. Default and determination of
the lease:
(1) On default being made by the
lessee in any of the conditions of the
lease, the Board may re-enter upon
the demised premises or any part
thereof in the name of the whole and
immediately thereupon the lease
shall absolutely determine.
(2) Where no default is made by the
lessee in the conditions of the lease,
then on determination of the lease at
the end of the term thereof, the Board
shall convey the premise to the lessee
at his cost and free of all restrictions
and liabilities imposed by the lease
and by this Act or by the City of
Bombay Improvement Act, 1898.
29. There is another enactment by the name of Mumbai
Municipal Corporation Act, 1888. Section 527 of the
said Act provided for statutory legal notice as a pre-
condition for filing a suit against the appellant
Corporation and also the limitation for filing a suit
once such a notice is given. Section 527 of the Act,
1888 is reproduced hereunder: -
CIVIL APPEAL NO.6667 OF 2023 Page 39 of 81
“527. (1) No suit shall be instituted
against the corporation or against
[the Commissioner, the General
Manager] [or the Director] or a Deputy
Commissioner, or against any
municipal officer or servant, in
respect of any act done in pursuance
or execution or intended execution of
this Act or in respect of any alleged
neglect or default in the execution of
this Act,-
(a) Until the expiration of one month
next after notice in writing has been,
in the case of the corporation, left at
the chief municipal office and, in the
case of [the Commissioner, the
General Manager] [or the Director] or
of a Deputy Municipal Commissioner
or of a municipal officer or servant
delivered to him or left at his office or
place of abode, stating with
reasonable particularity the cause of
action and the name and place of
abode of the intending plaintiff and of
his attorney or agent if any, for the
purpose of suit; nor
(b) Unless it is commenced within six
months next after the accrual of the
cause of action.
(2) At the trial of any such suit –
CIVIL APPEAL NO.6667 OF 2023 Page 40 of 81
(c) The plaintiff shall not be
permitted to go into evidence of any
cause of action except such as is set
forth in the notice delivered or left by
him as aforesaid;
(d) The claim, if it be for damages
shall be dismissed if tender of
sufficient amount shall have been
made before the suit was instituted or
if, after the institution of the suit, a
sufficient sum of money is paid into
Court with costs.
(3) When the defendant in any such
suit is a municipal officer or servant,
payment of the sum or of any part of
any sum payable by him in or in
consequence of the suit whether in
respect of cost, charges, expenses,
compensation for damage or
otherwise, may be made, with the
[previous] sanction of the [Standing
Committee or the Brihan Mumbai
Electric Supply and Transport
Committee] from the municipal fund
or the [Brihan Mumbai Electric
Supply Transport Fund] as the case
may be.”
30. The core issues to be considered are two:
(i) Whether the appellant-Corporation was at
all bound to convey the lease land , on
completion of the terms of the lease, in favour of
CIVIL APPEAL NO.6667 OF 2023 Page 41 of 81
the Respondent No.1 free from all restrictions
and liabilities or not. If the answer is that there
was no compulsion for the appellant either
under the statute or under the terms of the
lease deed to convey, then the Respondent No.1
would have no case at all. If the answer is
positive that they were required to convey the
lease land, then the interpretation of the words
“at his cost” in Section 51(2) of the 1925 Act
would be required.
(ii) The other question would be whether the
writ petition filed before the Bombay High Court
suffered from delay and laches and was liable to
be dismissed on that ground alone as the cause
of action had arisen in the year 1955 whereas
the writ petition was filed in the year 2016 after
a delay of 61 (sixty-one) years. Related issue to
be considered is that a Notice under Section 527
of the 1888 Act was given in the year 2006 and,
thereafter, no steps were taken for a period of
ten years for filing a suit even though the
limitation prescribed was six months as per the
above provisions. The Respondent No.1 instead
CIVIL APPEAL NO.6667 OF 2023 Page 42 of 81
of filing a suit preferred a writ petition in the
year 2016. Another inter-linked issue would be
whether a writ petition ought to have been
entertained at all where the actual and real
remedy was by way of a civil suit for specific
performance or for mandatory injunction.
31. Under Resolution No. 121 dated 16.04.1918, the
Respondent No.1 was required to construct 44 Blocks
of poorer classes dwellings consisting 980 rooms and
20 shops, as a pre-condition to be fulfilled for
execution of the lease under Section 32G of the 1898
Act. The Respondent No.1 after receiving possession
of land, constructed only 476 dwellings and 10 shops
till the year 1925. As provided under the 1925 Act,
the earlier schemes already approved under the 1898
Act were saved and were to be executed by the Board
under the 1925 Act.
32. The Respondent No.1 applied for alteration of Scheme
No. 51 notified on 01.05.1918 vide their application
dated 10.03.1927. Later on, vide letter of their
solicitors- M/s C.N. Wadia dated 20.05.1927, a
request was made that the Board may accept 476
rooms instead of 980 rooms and 10 shops instead of
CIVIL APPEAL NO.6667 OF 2023 Page 43 of 81
20 shops required under the old scheme. They also
requested for conveyance of Block-B and for 28 years
lease of Block-A and eventual conveyance of Block-A
on completion of the lease period. As the contents of
this letter of M/s C.N. Wadia and Co. dated
20.05.1927 have been referred to in the subsequent
Board resolution, it would be appropriate to
reproduce paragraphs 2,4, 5 and 6 of the said letter,
which read as follows: -
“2. We also request that the
Committee will now grant to the
Company a Lease of Block A, for
a period of 28 years at a nominal
rent of one rupee per annum as
provided in the Act and a
conveyance of Block B.
4. We agree to keep a strip 5 feet in
width along the eastern boundary
of Block A, open and unbuilt upon,
to permit the board to lay a sewer
therein should they find it
necessary to do so. The
Conveyance in respect of this land
to be granted on the expiration of
the lease will also make provision
for this.
5. As regards Block B, we agree to the
following conditions: -
CIVIL APPEAL NO.6667 OF 2023 Page 44 of 81
(a) The layout of the land and the
plans, etc., of the buildings to be
erected thereon shall be subject to
the Board’s approval.
(b) The height of the buildings shall
not exceed a ground and three
floors.
(c) The user of the buildings and land
shall be confined to shops, chawls,
offices, residences, godowns and a
wireless and broadcasting station.
(d) All buildings to be set back 15 feet
from the road on the south and the
same distance between the points
F and G from the 40 ft. road on the
west.
(e) An open space 10ft. in width if
ground floor buildings are erected,
or 15 feet in the case of higher
buildings, to be left along the south
side of the boundary D.E.
(f) An open space 15 feet in width to
be left along and within the
boundaries Blocks A and B :
(g) Cost of and incidental to the
conveyance and stamp duty to be
paid by the Company.
CIVIL APPEAL NO.6667 OF 2023 Page 45 of 81
6. It is understood that at the end
of period of lease Block A is to be
conveyed to us as freehold land.”
33. The Board passed Resolution No. 325 on 31.05.1927
and granted alteration of the old scheme. While
passing the resolution, it considered the Chief
Officer’s note dated 21.05.1927 recommending the
Board to accept the request. The relevant extract of
the Chief Officer’s note dated 21.05.1927 is
reproduced hereunder: -
“”…3. Owing to the construction by
the Development Department of a
very large number of rooms in the
immediate vicinity more than
sufficient accommodation has been
provided and there is no necessity for
the Company to complete the full
number of rooms. They, therefore,
ask the Committee to alter the
Scheme in the manner proposed in
their letter and there is no objection
to this being done especially as the
Company has refunded to the Board
the amount, with interest, spent on
the acquisition of the land.””
34. The Board Resolution No. 325 dated 31.05.1927
reads as follows: -
“Resolution 325 – The Scheme should
be and the same is hereby altered by
CIVIL APPEAL NO.6667 OF 2023 Page 46 of 81
the exclusion of Blocks B & C on the
Estate Agent’s plan No.98…
2. a lease of Block A for a period of 28
years should be granted to the
Company on the terms mentioned in
paras 2 & 4 of Messrs. C.N. Wadia’s
letter, dated 20
th May, 1927.
3. Block B should be conveyed to the
Company on terms and conditions
mentioned in para 5 of the Company’s
letter.
4. Block C will remain the property of
the Board.”
35. Pursuant to the above resolution , Block-B was
conveyed to Respondent No.1 for sale consideration
of Rs.1,20,000/- on 10.01.1928 and later, lease of
Block-A was executed on 03.10.1928 for a period of
28 years effective from 01.04.1927 at a yearly rent of
Re.1/-(Rupee One). As such, the lease was to expire
on 31.03.1955. The lease deed dated 03.10.1928,
filed as Annexure-P2 before us, incorporates in its
initial part the facts including the details about the
Scheme no. 51, which was approved in 1918, with
regard to the entire land comprising of parcels A, B
and C with total land admeasuring 57,758 sq. yds. It,
CIVIL APPEAL NO.6667 OF 2023 Page 47 of 81
thereafter, refers to the partial construction by
Respondent No.1 and the request made by
Respondent No.1 on 10.03.1927 and 20.05.1927 for
alteration in the scheme. Thereafter, it goes on to
mention the approval of the alteration of said scheme
by the Board Resolution dated 31.05.1927 and, then
states the terms and conditions thereof. Under the
terms and conditions, lease of Block-A was granted
for a period of 28 years effective from 01.04.1927 with
a yearly rent of Re.1/- (Rupee One only) to be paid
without any deduction on first day of each April.
36. A perusal of the terms and conditions stated in the
lease agreement would reveal that there is no such
stipulation that on the expiry of the period of the
lease on 31.03.1955, after completion of 28 years, the
appellants would be bound to convey the said land to
Respondent No.1. Based on the above resolution
dated 31.05.1927 and the terms as incorporated in
the lease deed, the submission on behalf of the
appellants is that there was neither any decision
taken by the Board to convey the land in question on
expiration of the lease nor does the lease agreement
contain any such clause that the appellants were
bound to convey the land.
CIVIL APPEAL NO.6667 OF 2023 Page 48 of 81
37. It is also vehemently submitted that the High Court
completely fell in error in reading the Board’s
resolution as agreeing to convey the land on the
expiration of the lease and by interpreting the lease
agreement to have a clause that the Board would
convey the land on the expiration of the lease. Insofar
as the lease deed is concerned, the High Court read
the narration of the facts relating to the application
filed by Respondent No.1 for alteration dated
20.05.1927 to be a term of the lease to mean that on
expiration of the lease, there would be a conveyance.
In fact, there is no such stipulation in the terms and
conditions of the lease deed regarding the
conveyance. This was a clear misreading by the High
Court.
38. The lease deed dated 03.10.1928, nowhere recites
that the land comprising in Block -A would be
conveyed at the expiration of the lease term of 28
years provided there was no default on the part of the
lessee as provided in Section 51(2) of the 1925 Act.
The High Court, while referring to the narration of
facts in the initial part of the lease deed, has
misinterpreted the same to be a condition
incorporated in the lease deed for conveyance at the
CIVIL APPEAL NO.6667 OF 2023 Page 49 of 81
end of the period of lease i.e. on expiration of 28
years.
39. Insofar as the resolution of 31.05.1927 is concerned,
the proceedings of the said meeting have been filed
as Annexure-P1 before us, which is reproduced
hereunder:
“Annexure P-1
Exhibit ‘F’
Bombay Improvement Trust
SECRETARY OFFICE,
ESPLANADE ROAD
Excerpt from the Proceedings of a
Meeting of the Improvements
Committee held on the 31
st May
1927.
1. Re : Scheme No. 51 - Century Mills
Housing Scheme alteration in
Considered the. following ;.
(a) Letter from Messrs. C.N. Wadia
& Co., dt. 20
th May 1927.
“With reference to the
Committee’s Resolution No. 165,
dated the 24
th March last, we beg to
request that as we have paid to the
Board the sums due under Section
46(3) of the Act, the Committee
may be moved to alter the Scheme
under Section 37(2) by the
CIVIL APPEAL NO.6667 OF 2023 Page 50 of 81
omission therefrom of Blocks B and
C on the accompanying plan.”
2. We also request that the
Committee will now grant to the
Company a lease of Block A for a
period of 28 years at a nominal rent
of one rupee per annum as provided
in the Act and a conveyance of Block
B.
3. It was arranged in 1923 that plot C
should revert to the Trust.
4. We agree to keep a strip 5 feet in
width along the eastern boundary of
Block A, open and unbuilt upon, and
to permit the Board to lay a sewer
therein should they find it necessary·
to do so. The conveyance in respect of
this land to be granted on the
expiration of the lease will also make
provision for this.
5. As regards Block B, we agree to the
following conditions: -
(a) The lay out of the land and the
plans, etc., of the buildings to be
erected thereon shall be subject to
the Board’s approval.
(b) The height of the buildings shall
not exceed a ground and three floors.
CIVIL APPEAL NO.6667 OF 2023 Page 51 of 81
(c) The user of the buildings and land
shall be confided to shops, chawls,
offices, residences, godowns and a
wireless and broadcasting station.
(d) All buildings to be set back 15 feet
from the road on the south and the
same distance between the points F
and G from the 40 ft. road on the
west.
(e) An open space 10 ft. in width if
ground floor buildings are erected, or
15 feet in the case of higher buildings,
to be left along the south side of the
boundary D. E.
(f) An open space 15 feet in width to
be· left along and within the
boundaries Blocks A and B.
(g) Cost of and incidental to the
conveyance and stamp duty to be
paid by the Company.
6. It is understood that at the end of
the period of lease, Block A is to be
conveyed to us as freehold land”.
(b) Chief Officer’s note, dated 21
st
May 1927.
“This Scheme was sanctioned in 1919
and provided for the acquisition of the
land by the Board and the filling in of
the site and the construction of the
CIVIL APPEAL NO.6667 OF 2023 Page 52 of 81
buildings by the Century. Spinning
and Manufacturing Co., Ltd.
2. The Company originally
Intended to erect 44 blocks of
buildings containing 980 rooms and
20 shops and have in fact complete
476 rooms and 10 shops.
3. Owing to the construction by the
Development Department of a very
large number of rooms in the
immediate vicinity more than
sufficient accommodation has been
provided and there is no necessity for
the Company to complete the full
number of rooms. They, therefore,
ask the Committee to alter the
Scheme in the manner proposed in
their letter and there is no objection
to this being done especially as the
Company has refunded to the Board
the amount, with interest, spent on
the acquisition of the land.”
Resolution 325 - The Scheme
should be and the same is hereby
altered by the exclusion ·of Blocks
B & C on the Estate Agent’s plan
No. 98, dated 17
th May 1927.
2. A lease of Block A for a period of
28 years should be granted to the
Company on the terms mentioned
in paras 2 & 4 of Messrs. C.N.
CIVIL APPEAL NO.6667 OF 2023 Page 53 of 81
Wadia’s letter, dated 20
th May
1927.
3. Block B should be conveyed to the
Company on the terms and
conditions mentioned in para 5 of the
Company’s letter.
4. Block C will remain the property of
the Board.
True Excerpt,
C.P. GORWALLA
Secretary”
40. A careful reading of the above excerpts reflects that
the letter from M/s C.N. Wadia dated 20.05.1927 is
reproduced as it is in the beginning which runs into
6 paragraphs. Thereafter, it considered the Chief
Officer’s note dated 21.05.1927 which we have briefly
referred to in earlier part of this judgment. Thereafter,
it records that the Respondent No.1 originally
intended to erect 980 rooms with 20 shops. As per
the said note, it gave details of the original scheme,
the alteration requested for and further the reasons
that because of construction by the development
department, sufficient accommodation is now
available and there may not be any necessity for
company to complete the full number of rooms, as
CIVIL APPEAL NO.6667 OF 2023 Page 54 of 81
such the request for alteration may be considered.
Thereafter, the Resolution No. 325 is recorded which
reflects that the scheme stands altered by excluding
Block-B and Block-C, the lease of Block-A for a period
of 28 years to be granted on the terms mentioned in
paragraphs 2 and 4 of letter dated 20.05.1927 of M/s
C.N. Wadia, Block-B to be conveyed to the company
in terms of paragraph 5 of the aforesaid letter and
Block-C to remain property of the Board.
41. Based on the above reading of the resolution dated
31.05.1927, first and foremost, it must be noted that
paragraph 6 of the letter dated 20.05.1927 is not
approved by the Board which states that at the end
of the period of lease, Block-A is to be conveyed to the
company as freehold land. Secondly, it approves
granting of lease on the terms mentioned in
paragraphs 2 and 4 of the said letter dated
20.05.1927. Paragraph 2 does not refer to any
conveyance of Block-A. Paragraph 4 states about
leaving strip of five feet along eastern boundary open
and unbuilt to permit the Board to lay the sewer. It
further stipulates that the conveyance in respect of
“this land” to be granted on the expiration of the lease
CIVIL APPEAL NO.6667 OF 2023 Page 55 of 81
will also make provision for this. “This land” means
the strip of five feet and not Block-A.
42. The High Court’s recording that, once paragraph 4
refers to conveyance in respect of “this land”, it is to
be treated as Block-A, is actually misreading and
misinterpreting paragraph 4 of the communication
dated 20.05.1927. It only says the conveyance, if
made, on the expiration of the lease will take into
consideration provision for this land. The main
request of the Respondent No.1 in its communication
dated 20.05.1927 with regard to conveyance of
Block-A is stated in paragraph 6 which the Board
Resolution No. 325 does not approve or accept. The
High Court, thus, fell in error in reading paragraph 4
of the communication dated 20.05.1927 to
understand that the Board minutes approved the
conveyance of Block ‘A’.
43. The conveyance as stated in paragraph 4 is with
respect to five feet strip of land on the eastern side
and the same would become effective and applicable
only if paragraph 6 of their letter was accepted. In the
absence of approval of paragraph 6 of the said letter
dated 20.05.1927, it cannot be held that the Board
CIVIL APPEAL NO.6667 OF 2023 Page 56 of 81
approved the conveyance of Block-A after expiration
of the period of lease.
44. From the above analysis, it is more than clear that
neither the Board Resolution No. 325 dated
31.05.1927 nor the lease deed anywhere states about
conveyance of Block-A on the expiration of the lease
deed. The High Court, thus, fell in error in
interpreting both the documents otherwise.
45. Further arguments on behalf of Respondent No.1
with respect to conveyance being executed rest on
Section 51(2) of 1925 Act. In this respect, it would be
appropriate to first deal with Section 48(a) of the
1925 Act and read Section 51(2) of the said Act along
with the said provision. Under Section 48(a) of the
1925 Act on the expiration of the lease period, the
lessee shall leave the demised premises in good and
substantial repair conditions along with fixtures, if
any, whereas Section 51(2) of the said Act provides
that where no default is made by the lessee in the
conditions of the lease, then on determination of the
lease at the end of the term, the Board shall convey
the premise to the lessee at his cost and such
conveyance to be free of all restrictions and liabilities
imposed under the lease deed and also by the 1898
CIVIL APPEAL NO.6667 OF 2023 Page 57 of 81
Act. The submission on behalf of the appellants is
that Section 48(a) of the 1925 Act would be rendered
otiose and meaningless, if Section 51(2) of the said
Act is read and interpreted as submitted by the
counsel for Respondent No.1 which is to the effect
that, Section 51(2) of the said Act being a special
provision whereas Section 48(a) thereof is a general
provision, the special provision will prevail over the
general provision. We may not agree with the above
submission of Respondent No.1 as submitted but
would rather read both the provisions and test
whether they could co-exist and be construed
harmoniously.
46. Both the provisions, Section 48(a) and Section 51(2)
of the 1925 Act, have to be read in the context in
which they have been incorporated. Section 48 of the
1925 Act provides the general conditions of the lease
given under the PCAS placing restrictions on the
lessee as to how it would use and how the rent etc.
would be determined for letting out the tenements.
Whereas, Section 51 of the said Act provides for
default, and determination of the lease. If there is
default, then under Section 51(1) of the 1925 Act, the
Board has a right to re-enter upon the demised
CIVIL APPEAL NO.6667 OF 2023 Page 58 of 81
premises whereas under sub -Section (2) thereof
provides that where no default is made, the Board
shall convey the premise to the lessee at his cost.
47. If Section 48(a) and Section 51(2) of the 1925 Act are
to be interpreted harmoniously, the net result is that
under general provisions, the lessee has to leave the
premise on completion of the period of lease ,
however, it will have a right to get the conveyance
executed at the end of the lease, provided there has
been no default, after paying the cost of the said
premise.
48. Well-settled principles of statutory interpretation
demand that no provision of a statute should be
rendered nugatory or superfluous. A statute must be
construed as a coherent whole, ensuring that each
part has meaningful content and that the legislative
scheme remains workable. Where two provisions
appear to be in tension, the proper course is to adopt
a construction that reconciles them, allowing both to
operate and giving effect to the underlying legislative
intent. It is neither necessary nor desirable to treat
section 51(2) of the 1925 Act as an absolute mandate
that would override or negate Section 48(a) thereof.
Instead, they must be read harmoniously so that the
CIVIL APPEAL NO.6667 OF 2023 Page 59 of 81
duty to restore the premises at the end of the lease
remains intact, unless a clear contrary intention
emerges, and the right to conveyance under Section
51(2) thereof is recognized as contingent, not
automatic.
49. Such a reading is consistent with the accepted
principle that a statutory provision should not be
construed in a manner that would reduce another
provision to a “dead letter.” The reference in Section
48(a) of the 1925 Act leaving the premises in good
repair is not a mere formality but a substantive
condition governing the lessee’s obligations.
Simultaneously, Section 51(2) thereof contemplates a
conveyance only where the conditions of the lease
have been duly met and the terms of the governing
arrangement so permit. By interpreting Section 51(2)
of the said Act as a provision that confers a right to
conveyance contingent upon the terms of the lease
and the broader legislative context, rather than as an
unqualified command, the overall scheme of the Act
is preserved. This ensures that the statute remains
fully operative, logical, and internally consistent.
50. Interpreting Section 51(2) in this calibrated manner
ensures that no non-obstante clause or hierarchical
CIVIL APPEAL NO.6667 OF 2023 Page 60 of 81
superiority is artificially read into the statute.
Nothing in the language of Section 51(2) of the 1925
Act suggests that it must prevail to the exclusion of
other provisions, nor does Section 48(a) thereof state
that its conditions are subject to displacement by
Section 51(2) of the said Act. Each provision, on a
proper reading, retains its respective field of
operation. The terms and intentions underlying the
lease itself become the primary determinant of
whether the eventual conveyance is warranted or not.
Thus, rather than insisting that “shall convey”
invariably means an unconditional obligation, it is
more appropriate to understand that it calls for
conveyance only where the arrangement and
compliance align with the statutory prerequisites.
51. By employing a harmonious construction, the 1925
Act’s provisions are allowed to complement rather
than contradict one another. This approach upholds
the integrity of the legislative scheme, ensures that
none of its components are undermined, and
maintains a balance between the obligations imposed
on a lessee and any rights that may accrue at the end
of the lease’s tenure. These principles were reiterated
CIVIL APPEAL NO.6667 OF 2023 Page 61 of 81
by a three-Judge Bench of this Court in CIT (supra).
The relevant paragraphs are reproduced hereunder:
“14.A construction which reduces the statute
to a futility has to be avoided. A statute or
any enacting provision therein must be so
construed as to make it effective and
operative on the principle expressed in the
maxim ut res magis valeat quam pereat i.e. a
liberal construction should be put upon
written instruments, so as to uphold them, if
possible, and carry into effect the intention
of the parties. [See Broom's Legal Maxims
(10th Edn.), p. 361, Craies on Statutes (7th
Edn.), p. 95 and Maxwell on Statutes (11th
Edn.), p. 221.]
15. A statute is designed to be workable and
the interpretation thereof by a court should
be to secure that object unless crucial
omission or clear direction makes that end
unattainable. (See Whitney v. IRC [1926 AC
37 : 10 Tax Cas 88 : 95 LJKB 165 : 134 LT
98 (HL)] , AC at p. 52 referred to in CIT v. S.
Teja Singh [AIR 1959 SC 352 : (1959) 35 ITR
408] and Gursahai Saigal v. CIT [AIR 1963
SC 1062 : (1963) 48 ITR 1] .)
16. The courts will have to reject that
construction which will defeat the plain
intention of the legislature even though there
may be some inexactitude in the language
used. (See Salmon v. Duncombe [(1886) 11
AC 627 : 55 LJPC 69 : 55 LT 446 (PC)] AC at
p. 634, Curtis v. Stovin [(1889) 22 QBD 513
: 58 LJQB 174 : 60 LT 772 (CA)] referred to
in S. Teja Singh case [AIR 1959 SC 352 :
(1959) 35 ITR 408] .)
CIVIL APPEAL NO.6667 OF 2023 Page 62 of 81
17. If the choice is between two
interpretations, the narrower of which would
fail to achieve the manifest purpose of the
legislation, we should avoid a construction
which would reduce the legislation to futility,
and should rather accept the bolder
construction, based on the view that
Parliament would legislate only for the
purpose of bringing about an effective result.
(See Nokes v. Doncaster Amalgamated
Collieries [(1940) 3 All ER 549 : 1940 AC
1014 : 109 LJKB 865 : 163 LT 343 (HL)]
referred to in Pye v. Minister for Lands for
NSW [(1954) 3 All ER 514 : (1954) 1 WLR
1410 (PC)] .) The principles indicated in the
said cases were reiterated by this Court in
Mohan Kumar Singhania v. Union of India
[1992 Supp (1) SCC 594 : 1992 SCC (L&S)
455 : (1992) 19 ATC 881 : AIR 1992 SC 1] .
18. The statute must be read as a whole and
one provision of the Act should be construed
with reference to other provisions in the
same Act so as to make a consistent
enactment of the whole statute.
19. The court must ascertain the intention of
the legislature by directing its attention not
merely to the clauses to be construed but to
the entire statute; it must compare the
clause with other parts of the law and the
setting in which the clause to be interpreted
occurs. (See R.S. Raghunath v. State of
Karnataka [(1992) 1 SCC 335 : 1992 SCC
(L&S) 286 : (1992) 19 ATC 507 : AIR 1992 SC
81] .) Such a construction has the merit of
avoiding any inconsistency or repugnancy
either within a section or between tw o
CIVIL APPEAL NO.6667 OF 2023 Page 63 of 81
different sections or provisions of the same
statute. It is the duty of the court to avoid a
head-on clash between two sections of the
same Act. (See Sultana Begum v. Prem
Chand Jain [(1997) 1 SCC 373 : AIR 1997 SC
1006] .)
20. Whenever it is possible to do so, it must
be done to construe the provisions which
appear to conflict so that they harmonise. It
should not be lightly assumed that
Parliament had given with one hand what it
took away with the other.
21. The provisions of one section of the
statute cannot be used to defeat those of
another unless it is impossible to effect
reconciliation between them. Thus a
construction that reduces one of the
provisions to a “useless lumber” or “dead
letter” is not a harmonised construction. To
harmonise is not to destroy.”
52. Therefore, in our considered opinion, the interplay
between Sections 48(a) and 51(2) of the 1925 Act is
resolved through a construction that acknowledges
the necessity of leaving the premises in good
condition at the expiration of lease, while recognizing
that a conveyance can be contemplated only where
such a course is unequivocally aligned with the lease
terms and the statutory framework as a whole. This
reconciliation preserves the intention of the
legislature, avoids destructive interpretations, and
CIVIL APPEAL NO.6667 OF 2023 Page 64 of 81
provides a coherent, just, and practical reading of the
statute.
53. In light of the above discussion, it becomes evident
that neither the statutory framework in force nor the
terms of the lease deed imposed any obligation upon
the appellant to execute a conveyance in favour of the
Respondent No.1. While the Respondent No. 1 has
sought to rely upon selective readings of the statutory
provisions and the Board’s resolutions, a harmonious
and contextual interpretation of Sections 48(a) and
51(2) of the 1925 Act, as well as the clear absence of
any covenant to that effect in the lease deed,
unequivocally demonstrates that no vested right to
conveyance arose on the expiration of the lease.
Absent any express statutory mandate or contractual
stipulation, the claim for compulsory conveyance at
the end of the lease term must fail.
54. Even if in arguendo, we agree to the Respondent
No.1’s contention that the lease conferred a right to
conveyance in their favour, the fact that cannot be
overlooked is that Respondent No.1 failed to take any
active step in furtherance of getting such a
conveyance executed at the end of the lease term. A
major reliance has been placed by the Respondent
CIVIL APPEAL NO.6667 OF 2023 Page 65 of 81
No.1 on Section 51(2) of the 1925 Act, which clearly
states that the Board shall convey the premises to the
lessee at his cost. The term “at his cost” shall include
the charges involved in conversion of lease hold
property into free hold property and would routinely
comprise of registration charges, stamping charges
etc. It is evident that the Respondent No.1, after the
expiry of term of the lease, has neither paid any such
charges towards the cost in an effort to seek
conveyance nor availed any alternative remedy by
filing a suit for specific performance or mandatory
injunction. Therefore, the Respondent No.1’s reliance
on Section 51(2) will also not come to their rescue
when it is apparent that they have not fulfilled their
part of the obligation under the said provision.
55. From the above discussion and analysis, the first
core question stands answered in favour of the
appellants that they were neither bound nor were
under any legal obligations to convey the premises
comprising Block-A to the Respondent No.1.
56. Now we come to the second core issue regarding the
writ petition before the High Court suffering from
serious delay and laches and as such liable to be
dismissed on that ground alone. Admittedly, the term
CIVIL APPEAL NO.6667 OF 2023 Page 66 of 81
of the lease came to an end on 31.03.1955. It is also
uncontested that thereafter the Respondent No.1
never claimed execution of conveyance at any point
of time till 2006, when for the first time they issued a
legal notice dated 14.08.2006 purported to be under
Section 527 of the 1888 Act requiring the appellant
to execute the conveyance deed. Thus, for a period of
51 years, the Respondent No.1 did not raise any
demand whatsoever for execution of the conveyance
deed. Their contention that they were in constant
communication with the officers of the Corporation,
though orally, the fact remains that no legal
proceedings were undertaken during this period.
Even after giving the notice under Section 527 of
1888 Act, the Respondent No.1 took no steps for a
period of 10 years by filing a suit or approaching the
Court even though the period of limitation prescribed
under the above provision was six months. Ten years
after the legal notice, they preferred the writ petition,
i.e. after 61 years of the cause of action having arisen.
57. We find that the High Court has cursorily dealt with
this aspect and held that the writ petition does not
suffer from laches. The High Court actually held that
there was inaction on the part of the appellant in not
CIVIL APPEAL NO.6667 OF 2023 Page 67 of 81
executing the conveyance deed. On the contrary,
Respondent No.1 never approached the appellant
requiring them either to provide the details of the
stamp duty, registration charges etc. so that the
conveyance deed could be typed out on such stamp
papers and thereafter to be presented for registration.
The Respondent No.1 has neither made any
pleadings nor has led any evidence to the above
effect.
58. The view taken by the High Court in treating the
petition to be not suffering from any delay and laches
cannot be sustained. Reference may be made to the
following judgments wherein delay and laches being
non-condonable while filing petition, especially under
land acquisition matters, has been elaborately dealt
with and has been the consistent view of this Court
that such belated petitions are liable to be dismissed.
59. In Aflatoon v. Lt. Governor of Delhi
21
, it was held
that:
“9. Assuming for the moment that the public
purpose was not sufficiently specified in the
notification, did the appellants make a
grievance of it at the appropriate time? If the
appellants had really been prejudiced by the
21
(1975) 4 SCC 285
CIVIL APPEAL NO.6667 OF 2023 Page 68 of 81
non-specification of the public purpose for
which the plots in which they were interested
were needed, they should have taken steps
to have the notification quashed on that
ground within a reasonable time. They did
not move in the matter even after the
declaration under Section 6 was published in
1966. They approached the High Court with
their writ petitions only in 1970 when the
notices under Section 9 were issued to them.
In the concluding portion of the judgment in
Munshi Singh v. Union of India [(1973) 2
SCC 337, 342 : (1973) 1 SCR 973, 975, 984]
, it was observed: [SCC p. 344, para 10]
“In matters of this nature we would have
taken due notice of laches on the part of
the appellants while granting the above
relief but we are satisfied that so far as
the present appellants are concerned
they have not been guilty of laches, delay
or acquiescence at any stage.”
We do not think that the appellants were vigilant.
10. That apart, the appellants did not
contend before the High Court that as the
particulars of the public purpose were not
specified in the notification issued under
Section 4, they were prejudiced in that they
could not effectively exercise their right
under Section 5-A. As the plea was not raised
by the appellants in the writ petitions filed
before the High Court, we do not think that
the appellants are entitled to have the plea
considered in these appeals.
CIVIL APPEAL NO.6667 OF 2023 Page 69 of 81
11. Nor do we think that the petitioners in
the writ petitions should be allowed to raise
this plea in view of their conduct in not
challenging the validity of the notification
even after the publication of the declaration
under Section 6 in 1966. Of the two writ
petitions, one is filed by one of the
appellants. There was apparently no reason
why the writ petitioners should have waited
till 1972 to come to this Court for challenging
the validity of the notification issued in 1959
on the ground that the particulars of the
public purpose were not specified. A valid
notification under Section 4 is a sine qua non
for initiation of proceedings for acquisition of
property. To have sat on the fence and
allowed the Government to complete the
acquisition proceedings on the basis that the
notification under Section 4 and the
declaration under Section 6 were valid and
then to attack the notification on grounds
which were available to them at the time
when the notification was published would
be putting a premium on dilatory tactics. The
writ petitions are liable to be dismissed on
the ground of laches and delay on the part of
the petitioners (see Tilokchand Motichand v.
H.B. Munshi [(1969) 1 SCC 110 : (1969) 2
SCR 824] and Rabindranath Base v. Union
of India [(1970) 1 SCC 84 : (1970) 2 SCR
697]).”
CIVIL APPEAL NO.6667 OF 2023 Page 70 of 81
60. Similarly, in Hari Singh v. State of U.P.
22
, it was
observed that:
“4. At the outset we are of the view that the
writ petition filed in July 1982 questioning
the notification issued in January 1980 after
a delay of nearly two and a half years is liable
to be dismissed on the ground of laches only.
It is no doubt true that the appellants have
pleaded that they did not know anything
about the notifications which had been
published in the Gazette till they came to
know of the notices issued under Section 9(3)
of the Act but they have not pleaded that
there was no publication in the locality of the
public notice of the substance of the
notification as required by Section 4(1) of the
Act. It should be presumed that official acts
would have been performed duly as required
by law. It is significant that a large number
of persons who own the remaining plots have
not challenged the acquisition proceedings.
The only other petition in which these
proceedings are challenged is Civil Misc. Writ
Petition No. 11476 of 1982 on the file of the
High Court filed subsequently by Amar Singh
and four others. Moreover in a small place
like Kheragarh where these plots are situate,
the acquisition of these lands would be the
talk of the town in a short while and it is
difficult to believe that the appellants who
are residents of that place would not have
known till July 1982 that the impugned
notification had been published in 1980. Any
22
(1984) 2 SCC 624
CIVIL APPEAL NO.6667 OF 2023 Page 71 of 81
interference in this case filed after two and a
half years with the acquisition proceedings is
likely to cause serious public prejudice. This
appeal should, therefore, fail on the ground
of delay alone.”
61. Likewise, in Municipal Corporation of Greater
Bombay v. Industrial Development Investment
Co. (P) Ltd.
23 , with regards to the question of delay
and laches, it was held that:
“29. It is thus well-settled law that when
there is inordinate delay in filing the writ
petition and when all steps taken in the
acquisition proceedings have become final,
the Court should be loath to quash the
notifications. The High Court has, no doubt,
discretionary powers under Article 226 of the
Constitution to quash the notification under
Section 4(1) and declaration under Section 6.
But it should be exercised taking all relevant
factors into pragmatic consideration. When
the award was passed and possession was
taken, the Court should not have exercised
its power to quash the award which is a
material factor to be taken into consideration
before exercising the power under Article
226. The fact that no third party rights were
created in the case is hardly a ground for
interference. The Division Bench of the High
Court was not right in interfering with the
discretion exercised by the learned Single
23
(1996) 11 SCC 501
CIVIL APPEAL NO.6667 OF 2023 Page 72 of 81
Judge dismissing the writ petition on the
ground of laches.”
62. More recently, this Court in New Okhla Industrial
Development Authority v. Harkishan
24
, had held
that:
“12. More importantly, when the
respondents made the representation, it was
dealt with and rejected by the State
Government vide order dated 3-12-1999. At
that time, award had been passed. However,
in the second round of writ petitions
preferred by the respondents, they chose to
challenge only Office Order dated 3-12-1999
vide which their representation under
Section 48 of the Act had been rejected and
it never dawned on them to challenge the
validity of the award on the ground that the
same was not passed within the prescribed
period of limitation. As noted above, in the
second round of litigation also, the
respondents failed in their attempt,
inasmuch as, this Court put its imprimatur
to the rejection order dated 3-12-1999 vide
its judgment dated 12-3-2003 [Ved Prakash
v. Ministry of Industry, (2003) 9 SCC 542] .
At that time, even the possession of land had
been taken. If the respondents wanted to
challenge the validity of the award on the
ground that it was passed beyond the period
of limitation, they should have done so
immediately and, in any case, in the second
24
(2017) 3 SCC 588
CIVIL APPEAL NO.6667 OF 2023 Page 73 of 81
round of writ petitions filed by them. Filing
fresh writ petition challenging the validity of
the award for the first time in the year 2004
would, therefore, not only be barred by the
provisions of Order 2 Rule 2 of the Code of
Civil Procedure, 1908, but would also be
barred on the doctrine of laches and delays
as well.”
63. There is yet another aspect of the matter to be
considered. The Respondent No.1 had a statutory
remedy of filing a suit under Section 527 of the 1988
Act which they could have availed. In fact, the
Respondent No.1 proceeded in that direction by
giving a notice to file a suit but never filed the suit
although limitation for the same was six months. The
Respondent No.1 apparently chose to file the writ
petition in 2016 after 10 years only in order to escape
from the clutches of the limitation. In this regard, it
was held in Shri Vallabh Glass Works Ltd. (supra),
that:
“9. …Whether relief should be granted to a
petitioner under Article 226 of the
Constitution where the cause of action had
arisen in the remote past is a matter of sound
judicial discretion governed by the doctrine
of laches. Where a petitioner who could have
availed of the alternative remedy by way of
suit approaches the High Court under Article
CIVIL APPEAL NO.6667 OF 2023 Page 74 of 81
226 of the Constitution, it is appropriate
ordinarily to construe any unexplained delay
in the filing of the writ petition after the
expiry of the period of limitation prescribed
for filing a suit as unreasonable. This rule,
however, cannot be a rigid formula. There
may be cases where even a delay of a shorter
period may be considered to be sufficient to
refuse relief in a petition under Article 226 of
the Constitution. There may also be cases
where there may be circumstances which
may persuade the court to grant relief even
though the petition may have been filed
beyond the period of limitation prescribed for
a suit. Each case has to be judged on its own
facts and circumstances touching the
conduct of the parties, the change in
situation, the prejudice which is likely to be
caused to the opposite party or to the general
public etc. In the instant case, the appellants
had in fact approached the High Court on
September 28, 1976 itself by filing Special
Civil Application No. 1365 of 1976 for
directing repayment of the excess duty paid
by them. But no relief could be granted in
that petition in view of the provisions of
Article 226 of the Constitution as it stood
then and the petition had to be withdrawn.
Hence even granting that on the date of
making each paymen t of excise duty in
excess of the proper duty payable under law,
the appellants should be deemed to have
discovered the mistake, all such excess
payments made on and after September 28,
1973 which would fall within the period of
three years prior to the date on which Special
CIVIL APPEAL NO.6667 OF 2023 Page 75 of 81
Civil Application No. 1365 of 1976 was filed
should have been ordered to be refunded
under Article 226 of the Constitution. But
the High Court declined to do so on grounds
of estoppel and acquiescence. While we do
agree that the appellants should not be
granted any relief in respect of payment
made between October 1, 1963 and
September 27, 1973 which would fall beyond
three years from the date of the first writ
petition filed in this case we do not find it
proper and just to negative the claim of the
appellants in respect of excess payments
made after September 28, 1973. In the
instant case the appellants had made excess
payments on being assessed by the
Department and such payments cannot be
treated as voluntary payments precluding
them from recovering them. (See Sales Tax
Officer v. Kanhaiya Lal Mukundlal Saraf [AIR
1959 SC 135 : (1959) SCR 1350 : 9 STC 747]
.) We do not also find that the conduct of the
appellants is of such a nature as would
disentitle them to claim refund of excess
payments made in respect of goods other
than wired glass.”
Therefore, the writ petition ought to have been
dismissed on this ground of delay and laches alone.
We find no merit in the conduct of the Respondent
No. 1 where it deliberately chose to sit still on its
rights for a long period of fifty-one years. Even after
such a belated delay and sending a notice to the
CIVIL APPEAL NO.6667 OF 2023 Page 76 of 81
appellant in 2006, the Respondent No.1 again failed
to exhibit any diligence and chose not to file a suit
within the period of limitation under the 1888 Act.
Instead, the Respondent No.1 has shown utmost
craftiness and lack of bona fide in preferring the writ
petition before the High Court in 2016 as it is clearly
a route adopted to subvert the long delay of sixty-one
years, which we do not find condonable, given the
conduct of the Respondent No.1 throughout.
64. Further, it must also be observed that Respondent
No.1 had submitted plans in 2009 for altering the use
of Plot A for commercial purposes and would no
longer be providing for Poorer Classes
Accommodation as was agreed in the lease deed of
1928. Clause 2(VIII) of the lease deed has been
reproduced below which explicitly states the purpose
of the lease deed:
“VIII To use the demised premises (except
such portions thereof as contain shops,
caretakers' quarters, and the like) exclusively
as dwellings for the members of the poorer
classes, being persons employed by the
Lessees in the course of their business, and
the families of such persons, except in so far
as there may not be sufficient numbers of
such persons willing to occupy the same, and
CIVIL APPEAL NO.6667 OF 2023 Page 77 of 81
in any case only for members of the poorer
classes. And in particular not to use the
demised premises or any part thereof, or
permit the same to be used as a public
house, refreshment room, booth, or shop for
the sale for consumption either on or off the
demised premises of intoxicating liquors,
whether country or foreign, and whether by
retail or wholesale, or for any other purpose
whatsoever otherwise than as dwellings,
except with the previous consent in writing
of the Board, and not at any time to permit
stables, factories, workshops, or workplaces
on the demised land. And not to do or suffer
to be done on the said premises anything
which may be or become noisome, injurious,
or offensive to the Board or the owners or
occupiers of this or any other property in the
neighbourhood.”
65. Moreover, the Preamble to the 1925 Act also clearly
states that it “was enacted with a view to make
provision for the improvement and for the future
expansion of the City of Bombay by forming new and
altering streets, by removing or altering insanitary
buildings in certain areas, by providing open spaces
for better ventilation and for recreation, by
constructing new sanitary dwellings for certain
classes of the inhabitants of the said city and for the
Bombay City police, by laying out vacant lands and by
divers other means;”. While the Respondent No.1
CIVIL APPEAL NO.6667 OF 2023 Page 78 of 81
would have been allowed to use it for commercial
purposes had the land been duly conveyed to them,
it has already been shown that conveyance was never
granted in the sale deed dated 1928, nor was any
“cost” paid for the conveyance. The lease deed, by
itself, did not confer any rights to convert the usage
of the lands for commercial purposes.
66. It is clear that the protective and welfare-oriented
character of the arrangement is integral to the
statutory objective. The inclusion of Clause 2(VIII) in
the lease deed was not a casual insertion; it was
intended to ensure that the property would serve as
an instrument of social betterment by housing those
who are economically vulnerable. This provision,
coupled with the Preamble’s emphasis on
“constructing new sanitary dwellings for certain
classes of the inhabitants,” reflects a deliberate
legislative policy to secure tangible benefits for the
poorer sections of society. The statutory and
contractual framework is not merely concerned with
property rights and transactions in the abstract; it
aims to harness urban development to serve the
pressing social needs of the community. By seeking
to redirect the property towards commercial
CIVIL APPEAL NO.6667 OF 2023 Page 79 of 81
exploitation, Respondent No.1 threatens to erode the
very foundation upon which the original agreement
stood. The contractual language and statutory
purpose are both premised on ensuring that the
“demised premises” remain dedicated to providing
adequate housing to those otherwise struggling to
find decent living conditions in a rapidly expanding
metropolis. To ignore or circumvent these conditions
would nullify the intended social function of the
property and transform a carefully crafted scheme of
public welfare into a mere instrument of private
profit.
67. Such a departure from the intended purpose is not
only a breach of the lease conditions but also a
subversion of the policy that animated the entire
statutory regime. The legislation and the contract
work in tandem to ensure that urban improvement
aligns with the welfare of weaker segments. When
land allocated under a special scheme, particularly
one centred on “poorer classes” accommodation, is
sought to be commercially exploited, it represents a
direct affront to the spirit of the enactment. Rather
than addressing housing inadequacies and
improving urban life for those in need, the resource
CIVIL APPEAL NO.6667 OF 2023 Page 80 of 81
would be diverted to profit-making ventures that do
nothing to alleviate the conditions of the
underserved.
68. This conduct amounts to an abuse of beneficial
legislation. The 1925 Act was clearly intended to
secure broader societal goals—better sanitation,
improved living standards, and well-planned urban
growth that includes and benefits marginalized
communities. Allowing Respondent No.1 to disregard
these obligations would open the door to hollowing
out the protections and advantages established by
the statute. It would set a precedent where statutory
schemes designed to uplift vulnerable groups could
be co-opted for purely commercial ends, undermining
the trust and faith that must exist between public
authorities, private actors, and the most vulnerable
segments of the population.
69. In essence, the entire arrangement is anchored on a
quid pro quo: the property is leased on special terms,
with minimal rent and under carefully prescribed
conditions, to ensure that the less-privileged receive
tangible benefits. When the lessee attempts t o
convert this arrangement into a vehicle for
commercial gain, it repudiates the fundamental
CIVIL APPEAL NO.6667 OF 2023 Page 81 of 81
bargain. The public trust reposed in the private entity
to serve a greater good is thus betrayed. This not only
harms the class of beneficiaries whom the legislation
and agreement were designed to protect, but also
imperils the broader public interest by allowing
beneficial legislative frameworks to be distorted and
exploited contrary to their genuine purpose.
70. For all the reasons recorded above, the judgment of
the High Court cannot be sustained. Accordingly, the
appeal is allowed, the impugned judgment of the High
Court is set aside, and the writ petition is dismissed.
71. Pending application(s), if any, shall stand disposed of.
…………………………………………J.
(VIKRAM NATH)
…………………………………………J.
(PRASANNA B. VARALE )
NEW DELHI
JANUARY 07, 2025
The Supreme Court's landmark ruling in Civil Appeal No.6667 of 2023, challenging a Bombay High Court Judgment, is now a crucial reference point for legal professionals, meticulously tracked on CaseOn. This judgment delves into the complex interplay of statutory provisions, contractual obligations, and the critical doctrine of delay and laches in property matters, setting a significant precedent for similar cases.
This case originated from a long-standing dispute over a plot of land in Mumbai (C.S. No.1546 of Lower Parel Division), initially earmarked for a 'Poorer Classes Accommodation Scheme' (PCAS) under the City of Bombay Improvement Act, 1898. Respondent No.1, Century Textiles and Industries Limited, had undertaken the construction of dwellings for poorer class workers, leading to a lease agreement that expired in 1955. The central question was whether this lease entitled the company to a formal conveyance of the land.
The Supreme Court primarily addressed two critical legal questions:
The Court's decision hinged on the interpretation of several key statutory provisions and legal doctrines:
Stipulates that the lessee must maintain the demised premises in good and substantial repair and leave them in the same condition at the end of the lease term.
States that if no default is made by the lessee, the Board shall convey the premises to the lessee at his cost and free of all restrictions and liabilities, upon determination of the lease.
Mandates a six-month limitation period for filing a suit against the Corporation after giving notice, for acts done in pursuance or execution of the Act.
The principle that all provisions of a statute must be read together to give them meaningful effect, avoiding interpretations that render any provision otiose or superfluous.
The doctrine that a special provision generally prevails over a general provision dealing with the same subject matter.
High Courts exercise discretionary powers under Article 226 of the Constitution, and significant, unexplained delay in seeking relief can lead to dismissal of the petition.
While vested rights are indefeasible, the pursuit of remedies must be timely, and delay can lead to forfeiture of relief, especially when statutory limitation periods are bypassed.
The Supreme Court meticulously analyzed the Board Resolution No. 325 (1927) and the lease deed (1928). It found that while Century Textiles' original letter (1927) requested conveyance of Block-A as freehold land upon lease expiry, this specific request (paragraph 6 of the letter) was *not* approved by the Board Resolution. The resolution only approved the lease of Block-A on terms mentioned in paragraphs 2 and 4 of the letter. Paragraph 4 referred to a conveyance provision for a 'five-foot strip of land' for sewer laying, not the entire Block-A.
The Court held that the High Court erred in misreading the resolution and the lease deed to imply an obligation for conveyance of Block-A. The lease deed itself did not contain any such clause. Therefore, there was no contractual obligation to convey.
The Court rejected Century Textiles' argument that Section 51(2) (mandating conveyance if no default) was a special provision overriding Section 48(a) (requiring premises to be left in good repair). Applying the principle of harmonious construction, the Court explained:
The Court concluded that Section 51(2) does not impose an absolute, unconditional obligation to convey. Instead, it grants a right to conveyance contingent on the lease terms and payment of costs, without nullifying the lessee's duty under Section 48(a) to leave the premises in good repair.
For legal professionals seeking swift comprehension of such detailed rulings, CaseOn.in offers invaluable 2-minute audio briefs, enabling quick analysis of complex judgments and their implications.
This was a crucial aspect of the judgment. The lease expired in 1955. Century Textiles first sought conveyance in 2006 (51 years later) via a legal notice under Section 527 of the 1888 Act, which prescribes a six-month limitation for filing a suit. Despite this notice, no suit was filed for another 10 years. The writ petition was eventually filed in 2016, 61 years after the cause of action arose.
The Supreme Court heavily criticized this delay, stating that the High Court cursorily dealt with this issue. It reaffirmed that unexplained, inordinate delay disentitles a petitioner from relief in writ jurisdiction, especially when statutory remedies with clear limitation periods were bypassed. The Court cited several precedents, including *Aflatoon v. Lt. Governor of Delhi*, *Hari Singh v. State of U.P.*, and *Municipal Corporation of Greater Bombay v. Industrial Development Investment Co. (P) Ltd.*, to underscore that such belated petitions prejudice public interest and amount to dilatory tactics.
A significant point was the original purpose of the scheme: providing housing for economically weaker sections (poorer classes). The lease deed specifically restricted the use of the premises for this purpose. Century Textiles' 2009 application to use Plot A for commercial purposes, after closing the mill in 2008, directly contradicted the statutory objective and the contractual terms. The Court viewed this as an attempt to convert a public welfare scheme into a private profit-making venture, betraying the public trust reposed in the private entity.
For all the reasons outlined above, the Supreme Court concluded that:
Accordingly, the Supreme Court **allowed the appeal**, **set aside the judgment of the Bombay High Court**, and **dismissed the writ petition** filed by Century Textiles and Industries Limited.
This Supreme Court judgment serves as a vital lesson in several areas of law:
It provides an excellent example of the application of harmonious construction, particularly when seemingly conflicting statutory provisions need reconciliation. Lawyers and students can learn how courts approach balancing different legislative intentions to ensure the coherence of a statute.
The case underscores the importance of precise language in contracts and resolutions. It demonstrates that implied intentions or unapproved requests, even if mentioned in correspondence, do not automatically become binding terms, especially in the absence of explicit acceptance.
This is a stark reminder of the strict application of delay and laches in public law remedies. The Court's strong stance against bypassing statutory limitation periods for suits by resorting to writ petitions after decades is crucial for understanding the principles governing equitable relief.
The judgment highlights the protective character of legislation designed for public welfare. It reinforces that schemes meant to benefit vulnerable sections of society cannot be unilaterally converted for private commercial exploitation, preserving the integrity of such arrangements.
In essence, this ruling emphasizes diligence, clarity in legal documentation, and respect for the foundational purpose of public welfare initiatives, providing profound insights for anyone involved in property law and public administration.
***
Disclaimer: All information provided in this article is for informational purposes only and does not constitute legal advice. Readers should consult with a qualified legal professional for advice on specific legal issues.
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