TaxTMI 
TaxTMI 
2025 (1) TMI 1642
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....espondent No.1 therein) to execute formal conveyance of plot bearing C.S. No. 1546 of Lower Parel Division, Mumbai in favour of 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 [The 1898 Act], 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 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....
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.... 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 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 [The 1888 Act] 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....
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....us or any other appropriate writ, order or directions 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 Dire....
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.... 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: i) Shri Vallabh Glass Works Ltd. v. Union of India [(1984) 3 SCC 362], ii) SS Rathore v. State of MP [(1989) 4 SCC 582] 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 ....
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.... 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 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 [(2009) 15 SCC 705]. 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 Ac....
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....learly 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 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,....
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....execute the conveyance. i) Managing Director Chattisgarh State Co- operative Bank Maryadit v Zila Sahkari Kendriya Bank Maryadit and Ors. [(2020) 6 SCC 411] ii) J.K. Spinning and Weaving Mill Co Ltd. v State of uttar Pradesh & Others [SCC Online SC 16] 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 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....
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....e 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 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 successors. (2) The Board on consideration of the said application, if they are of....
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....n 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, (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....
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.... 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; 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: - ....
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....e 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 written or painted up by the lessee in a conspicuous position in each such room or tenement. Such maximum rent s....
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....ce 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 - (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....
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.... 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 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 find they it necessary to do so. The Conveyance in respect of ....
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....2 & 4 of Messrs. C.N. Wadia's letter, dated 20th 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, 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 condition....
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....E, ESPLANADE ROAD Excerpt from the Proceedings of a Meeting of the Improvements Committee held on the 31st 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. 20th May 1927. "With reference to the Committee's Resolution No. 165, dated the 24th 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 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 expirat....
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.... in paras 2 & 4 of Messrs. C.N. Wadia's letter, dated 20th 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 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-....
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....ut 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 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 fo....
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....omatic. 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 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) t....
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....A)] referred to in S. Teja Singh case [AIR 1959 SC 352 : (1959) 35 ITR 408] .) 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 ....
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....he 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 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 resc....
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....dgments 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 [(1975) 4 SCC 285], 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 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 natur....
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....ssed 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 interference in this case fi....
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.... 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 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 c....
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....he 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 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 con....
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....e. 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 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 dedic....