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of <h1>Supreme Court rules against lease renewal, emphasizes procedural fairness and public property protection</h1> <h3>Saroj Screens Pvt. Ltd. Versus Ghanshyam and others</h3> Saroj Screens Pvt. Ltd. Versus Ghanshyam and others - TMI Issues Involved:1. Validity of the renewal of lease by the Corporation.2. Legality of the State Government's sanction u/s 70(5) of the City of Nagpur Corporation Act, 1948.3. Rights of the respondents based on previous resolutions and assignments.4. Application of the doctrine of equality in the alienation of public property.Summary:Issue 1: Validity of the renewal of lease by the CorporationThe Supreme Court upheld the Bombay High Court's decision to quash the Corporation's Resolution dated 28.8.1991, which renewed the lease in favor of the appellant for 30 years. The Court noted that the previous Resolution dated 29.10.1975, which renewed the lease in favor of Parmanand Mundhada, had not been canceled or rescinded. Therefore, during the subsistence of that resolution, the Corporation could not have renewed the lease in favor of the appellant. The Court emphasized that the Corporation did not obtain the necessary sanction from the State Government before passing the resolution, making it ex facie illegal.Issue 2: Legality of the State Government's sanction u/s 70(5) of the ActThe Court found that the State Government's sanction u/s 70(5) of the Act for the renewal of the lease was legally unsustainable. The Corporation's action of forwarding a proposal for post facto sanction and the State Government's accord of such sanction without following a procedure consistent with the doctrine of equality was impermissible. The Court highlighted that the alienation of public property must comply with the principles of equality enshrined in Article 14 of the Constitution.Issue 3: Rights of the respondents based on previous resolutions and assignmentsThe Court rejected the respondents' claim based on the renewal granted to Parmanand Mundhada in the 1975 resolution. It was noted that there was no evidence that Parmanand Mundhada or his heirs took any action in furtherance of the resolution, such as executing a fresh lease deed. The respondents' assertion that an appeal was filed against the increased ground rent and penalty was not substantiated with any details about the outcome of the appeal.Issue 4: Application of the doctrine of equality in the alienation of public propertyThe Court reiterated that the State and its agencies cannot arbitrarily transfer public property or interest therein to private entities without following a transparent and non-discriminatory process. The Corporation failed to issue any advertisement or follow a procedure that would allow public participation in the process of alienation of the plot. The Court emphasized that the Corporation holds property as a trustee of the public, and any alienation must be consistent with the principles of fairness, equality, and reasonableness.Conclusion:The appeals were dismissed, and the appellant was directed to hand over possession of the plot to the Corporation within three months. The Corporation was instructed to alienate the plot by auction or inviting tenders, ensuring compliance with Article 14 of the Constitution. The Corporation was also directed to pay the market value of the structure to the appellant.
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