New Kenilworth Hotel Pvt., Ltd.,No.1 & 2 Little Russel StreetKolkatta 700 071 v. State of Tamil Nadu

6.Jumhao's Joys Park Limited rep. By its Director P.V.Ravi No.36, K.P.N.Colony, First Street Tirupur 641 601... Respondents in both WPs.R6 impleaded asper orderdated 04.01.2007 in WPMP.No.17272/06Writ petitions filed under Article 226 of theConstitution of India praying for issuance of a Writ of CertiorarifiedMandamus, (1) calling for the records of the first respondent in G.O.(2D).No.20, Social Welfare and Nutritious Meal Programme Departmentdated 20.04.2005 and communicated to petitioner's counsel on27.04.2006 in WP.No.13440 of 2006 (2) in G.O.No.31 Social Welfare andNutritious Meal Programme Department, dated 09.05.2005 andcommunicated to petitioner's counsel on 07.11.2006 and quash the sameand consequently direct the respondents to permit the petitioner toproceed with the development of hotel project in terms ofG.O.Ms.No.254 Social Welfare and Nutritious Meal Programme (Sw.V)dated 22.09.1994 with such approvals as may be required in law.For petitioners : Mr.P.R.Raman for Mr.C.Seethapathy in both the WPs.For respondents : Mr.S.Veeraraghavan Addl.Advocate General III assisted by Mr.I.Paranthaman,AGP and Mr.L.S.M.Hasan Fizal Government Advocate for R.1to5 in both the WPs. Mr.R.Muthukumarasamy,Sr.Counsel for Mr.S.Udayakumar for R.6 in both the WPs.COMMON ORDERThe writ petitioner in these writ petitions is a PrivateLimited Company incorporated under the Indian Companies Act, 1956 andcarrying on the business of establishing, running and managing Hotels,among others. The Government, by G.O.Ms.No.111 dated 29.04.1993,issued by the Social Welfare Department, has decided to establish aRecreational-cum-Educational Complex and Children World for thewelfare of the youth to be set up at Coimbatore and directed theDistrict Collector to identify the location. Ultimately, as per thereport of the District Collector, the land measuring 25.19 acres atVilankurichi Village was found suitable, since the same is nearer toNational Highways. The second respondent, Revenue Department, under https://hcservices.ecourts.gov.in/hcservices/ whom the administration of lands would vest, issued G.O.Ms.No.900dated 18.10.1993, for establishment of an Amusement Park in the saidlocation by the Social Welfare Department, viz., the first respondent,since the same is for a public purpose. As the lands were originallyacquired, the first respondent, Social Welfare Department was directedto enter upon the lands declaring that the lands could be transferredfrom Medical Department to Social Welfare Department. 2. It is the case of the petitioner that subsequently, thelands were transferred from one Government Department to another,viz., from Medical Department to Social Welfare Department. The thirdrespondent, MAHAM is constituted by the Government to look after thewelfare of Children and Women in the State of Tamil Nadu and being theGovernment Company, it is run by the Social Welfare Department. TheGovernment has entrusted the task of setting up the Amusement ThemePark to the third respondent with the authority, and therefore, thelands were vested at the disposal of the third respondent with theconsent of other Departments. After the techno-economic survey by theSocial Welfare Department through experts, it was decided to have theTheme Park as an Amusement Complex with Shopping Arcade, Country Cluband a Star Hotel. Since it requires enormous amount for developingthe lands, etc., the third respondent sought permission from theGovernment to implement the project by way of joint venture or byleasing out the lands to private entrepreneurs on a profit sharingbasis or on long lease/rental basis. Hence, proposals were invited bywide publication in the newspapers by the Government on 03.08.1994, byway of tender.3. The petitioner has made an application for setting up aStar Hotel and the same was made on 29.08.1994 along with EarnestMoney Deposit of Rs.2 lakhs. The third respondent has ultimatelyaccepted the tender of the petitioner for leasing out the lands inquestion on long term lease for 33 years and accordingly, theGovernment has issued G.O.Ms.No.254 dated 22.09.1994 through theSocial Welfare Department granting lease in respect of 5 acres of landfor establishing a Star Hotel and according to the petitioner, thepetitioner continues to remain qualified for enforcing the saidproject.4. A registered lease deed was executed by the thirdrespondent with the petitioner on 05.10.1994 and possession of thelands was handed over to the petitioner. The registration was doneafter obtaining permission from the concerned authorities, likeIncome-tax Department, etc., and it was expressly mentioned that thefirst respondent had acquired the lands by transfer on 06.07.1994under a Government Order. By letter dated 28.10.1994, the firstrespondent has directed the District Collector, Coimbatore, to earmarkthe place leased out to the petitioner for setting up the Star Hoteland to another entrepreneur viz., M/s.Jenneys Residency PrivateLimited, to set up a Shopping Arcade and a Country Club. Accordingly,boundaries were marked and the lands were handed over to thepetitioner after the registration of the lease deed. https://hcservices.ecourts.gov.in/hcservices/

5. Two Public Interest Litigations in W.P.Nos.1152 of 1995 and9695 of 1995 were filed. W.P.No.1152 of 1995 for direction to formthe Annai Sandhya Theme Park, as per G.O.Ms.No.900 dated 16.10.1993,and not to use the land for any purpose other than the formation ofTheme Park on the allegation that the Hotels, Shopping Complex,Country Club are not related to the Amusement Park. The other writpetition, viz., W.P.No.9695 of 1995, filed for quashing G.O.Ms.No.900dated 16.10.1993, contending that the transfer of property from theGovernment Medical College, Coimbatore to the Social WelfareDepartment for establishing the Theme Park is illegal. After hearingall the parties, including the petitioner herein, by a common orderdated 22.09.1995, the writ petitions were dismissed, upholding thelease granted in favour of the petitioner and others and also holdingthat G.O.Ms.No.900 dated 16.10.1993, transferring the land from theMedical Department to Social Welfare Department for formation of ThemePark is valid and the lease granted to the petitioner for the purposeof starting a Star Hotel is also permissible. The order of theDivision Bench has become final. The petitioner has been paying rentregularly from 1994 onwards, till 1999. However, because of thependency of various cases, the petitioner is unable to undertake theproject.6. The petitioner is still complying with the terms of leaseby paying the lease amount continuously and the petitioner has made anapplication to the Local Planning Authority, Coimbatore on 20.11.1996,for approval of the building plan to put up a Five Star Hotel. Thatwas rejected on 05.12.1996 on the basis that the lands could be usedonly for educational purposes and the hotel project cannot come withinthe said object. Therefore, the petitioner has filed an appeal to theSecretary, Town Planning, Coimbatore, and also to the Director of Townand Country Planning, Chennai, against the said order. The saidauthorities have received the representation/appeal, but so far theyhave not passed any orders. In the meantime, on 11.03.1998, thepetitioner has received a notice from the first respondent, statingthat the transfer of lands from the Medical Department to SocialWelfare Department is non-est in law and the agreement entered betweenthe petitioner and the third respondent is also not valid and theGovernment has decided to resume the lands allotted to the petitioner.7. The petitioner has filed W.P.No.4404 of 1998, challengingthe said show-cause notice, which was disposed of by this Court on01.04.1998, directing the petitioner to file its objection to theGovernment and accordingly, the petitioner has filed its objection on08.04.1998. According to the petitioner, pursuant to the decision ofthe Division Bench of this Court in dismissing the Public InterestLitigation cases (W.P.Nos.1152 and 9695 of 1995) and also on the basisof the lease granted in its favour, the petitioner has spent more thanRs.55 lakhs, including the payment of lease rent. It is the furthercase of the petitioner that the annual lease of Rs.7.63 lakhs has beenreceived by the respondents as on 09.05.1996. The petitioner has alsosent three more demand drafts on 23.06.1997, 13.10.1998 and 17.03.1999 https://hcservices.ecourts.gov.in/hcservices/ and having received the same, the Government has neither encashed themnor returned the same. 8. The first respondent issued further notice to thepetitioner proposing to conduct enquiry based on the show cause noticeissued earlier which forced the petitioner to approach this Court byfiling W.P.No.19830 of 1998, forbearing the respondents fromdispossessing the petitioner from the 5 acres of land as per the leasedeed dated 05.10.1994. The said writ petition was disposed of on12.12.1999, by directing the Government to give opportunity to thepetitioner before passing any order on the show cause notice dated11.03.1998 with respect to its power to cancel the agreement. As perthe direction of the first respondent dated 26.03.2002, the petitionermade his representation on 05.04.2002, clearly stating that thepetitioner is still interested in proceeding with the project forconstructing a Five Star Hotel as per the original lease deed andhence, requested to reduce the lease rent and adjust the amountalready paid against the future rent. Thereafter, there was nocommunication from the first respondent and the petitioner has alsosent a reminder on 21.04.2004.9. In the meantime, another lessee, viz., M/s.JenneysResidency Private Limited, who was also allotted 5 acres under thesame Scheme to put up a Shopping Complex and Country Club has movedthis Court, challenging a similar show cause notice dated 11.03.1998,by filing W.P.No.5109 of 1998. The learned single Judge of thisCourt, by order dated 08.01.1999, quashed the show cause notice dated11.03.1998, directing the authorities to grant planning permission;against which the State has preferred appeals in W.A.Nos.428 of 1999and 582 of 1999 and by common judgement dated 18.09.2000, the DivisionBench has dismissed the appeals filed by the State Government andconsequently quashed the show cause notice dated 11.03.1998; directingthe Planning authorities to grant permission to the said M/s.JenneysResidency Private Limited and the said judgement has become final andas on today, the said M/s.Jenneys Residency Private Limited, isoperating the Country Club in the said premises. The writ appealswere dismissed on the ground that the petitioner in that case, viz.,M/s.Jenneys Residency Private Limited has acted upon the promise andincurred heavy expenditure. In the said proceedings, the presentpetitioner was not a party, however, the Division Bench in the saidJudgement has also stated that "if, as it is stated in the letterdated 22.09.1996 by the Collector of Coimbatore, other two alloteeshave not taken any action pursuant to the acceptance of their tenders,the Government is free to take such action as it deems fit".According to the petitioner, the said direction is not binding, sincethe petitioner was not a party to that petition and petitioner hereinas M/s.Jenneys Residency Private Limited are put on the same pedestal,because both of them have taken effective steps. 10. Further, in respect of M/s.Jenneys Residency PrivateLimited, they have put up construction and the petitioner is not ableto do so due to the pendency of various cases. Further, the said https://hcservices.ecourts.gov.in/hcservices/ M/s.Jenneys Residency Private Limited has put up the said constructionwithout waiting for planning permission, however the petitioner haswaited for such permission. As stated above, the petitioner has givenits representation and in the meantime, when the officials of thepetitioner sensed that some local persons have proceeded to measurethe land, the petitioner had to move the Civil Court, viz., DistrictMunsif, Coimbatore by filing O.S.No.244 of 2006 for injunction, whichwas subsequently withdrawn, on ascertaining that the persons whomeasured the land were Government officials only and the petitioner'sremedy lies somewhere else. Accordingly, the petitioner approachedthis Court by filing W.P.No.10786 of 2006 challenging the show causenotice dated 11.03.1998, based on the earlier judgement stated above.11. The said writ petition was filed and moved on 19.04.2006.The counsel for respondents took notice and the matter was listed on24.04.2006, to ascertain the status of the matter. The case wasfurther adjourned at request of the learned counsel for therespondents to 26.04.2006 and on the basis of oral instructionsreceived, the proceedings were concluded on 27.04.2006.12. The learned Government Advocate has produced copy of G.O.(2D)No.20 dated 20.04.2005, which is impugned in W.P.No.13440 of 2006,by which the first respondent has cancelled the lease of the land andordered refund of the lease rent. It was, recording the said fact,W.P.No.10786 of 2006, filed by the petitioner challenging the showcause notice dated 11.03.1998 was closed on 27.04.2006, with libertyto the petitioner to challenge the subsequent order dated 20.04.2005,which was produced before the Court. It was, thereafter, W.P.No.13440of 2006 was filed challenging the said G.O.(2D)No.20 dated 20.04.2005,cancelling the lease without issuance of notice to the petitioner andthis Court while entertaining the above said writ petition orderedinterim stay of dispossession, which remains operative and in thatfactual position, the 6th respondent, M/s.Jumhao's Joys Park Limitedhas sought to implead itself as a party and filed a petition to vacatethe stay in W.P.No.13440 of 2006.13. According to the petitioner, the 6th respondent was alsooriginally allotted about 10 acres of land in the year 1995 for thepurpose of setting up of an Amusement Park as per G.O.Ms.No.3 dated09.01.1995 by the first respondent. Two other persons were alsoallotted land of an extent of 5 acres each for the purpose of settingup of Shopping Arcade and Country Club and also a Star Hotel.According to the petitioner, it is only when the 6th respondent hasfiled impleading petition in W.P.No.13440 of 2006, for the firsttime, the petitioner came to know that the Government by G.O.Ms.No.31dated 09.05.2005, which is impugned in W.P.No.46153 of 2006, hasallotted 3.30 acres of land to the 6th respondent from and out of the 5acres of land allotted to the petitioner under the lease granted byG.O.Ms.No.245 dated 22.09.1994.14. Since the impugned G.O.No.31 dated 09.05.2005 was notserved on the petitioner, the petitioner made a request on 23.09.2006, https://hcservices.ecourts.gov.in/hcservices/ for issuance of copy of the impugned Government Order and the same wasserved on the petitioner on 07.11.2006, based on which W.P.No.46153 of2006, is filed. It is the case of the petitioner that G.O.(2D)No.20dated 20.04.2005 impugned in W.P.No.13440 of 2006 as well asG.O.Ms.No.31 dated 09.05.2005 impugned in W.P.No.46153 of 2006, werenever served on it. It is only in some other proceedings when thepetitioner came to know about the Government Orders, the petitionerwas constrained to file these writ petitions on various grounds,including that the impugned orders are illegal and that the impugnedGovernment Order cancelling the lease granted to the petitioner for 33years is violative of the principle of promissory estoppel. Bypassing the impugned order, the Government has shown bias in favour ofthe 6th respondent and that the impugned G.O.(2D)No.20 dated 20.05.2005was passed illegally by terminating the lease and within a period ofone month the other impugned G.O.Ms.No.31 dated 09.05.2005 came to bepassed, allotting 3-1/2 acres of land to the 6th respondent in anillegal manner, apart from stating that the impugned Government Ordersare violative of principles of natural justice.15. The first respondent through its Deputy Secretary hasfiled the counter affidavit in both the writ petitions. While it isadmitted that the first respondent under G.O.Ms.No.111 Social WelfareDepartment and Nutritious Meal Programme Department dated 29.04.1993,has issued orders for the establishment of Annai Sandhya ChildrenWorld at Coimbatore and also by a subsequent G.O.Ms.No.900 RevenueDepartment dated 18.10.1993, the Social Welfare and Nutritious MealProgramme Department was permitted to enter upon the lands to anextent of 25.19 acres and thereafter, the third respondent, which is aGovernment Corporation was entrusted with the work of implementationof the Scheme and persons including the petitioner were chosen on thebasis of tender for lease. It is the case of the first respondent thatthe transfer of land has never taken in favour of the firstrespondent, viz., Social Welfare Department and therefore, theGovernment decided to resume the land. It is admitted that this Courtwhile allowing the writ petition in W.P.No.19830 of 1998 on 12.02.1999has directed the Government to give opportunity to the petitionerbefore passing orders on the show cause notice dated 11.02.1998. 16. It is the case of the first respondent that the writpetitioner has decided not to run the business and therefore requestedthe Government for the refund of the expenditure that it has incurredunder various heads, viz.,1.Lease amount :Rs.38.17 lakhs; 2.Building cost :Rs.13.24 lakhs;3.Stamp duty :Rs. 3.24 lakhs; and4.Inagural expenses:Rs.10.00 lakhs--------------- Total:Rs.64.65 lakhs. --------------- https://hcservices.ecourts.gov.in/hcservices/ Therefore, according to the first and second respondents, by letterdated 14.05.2004, the petitioner has requested the Government torefund the entire amount which shows that the petitioner is notinterested in carrying on the business, for which the lease wasgranted to it. It was only after considering the same, the Governmenthas passed G.O.(2D)No.20 dated 20.40.2005, cancelling the order issuedin G.O.Ms.No.254 Social Welfare and Nutritious Meal Programme dated22.09.1994, allotting 5 acres of land to the petitioner, apart fromrefund of Rs.15.26 lakhs that had already been encashed towards thelease rent by the third respondent, to the petitioner, besidesreturning 3 demand drafts for Rs.22.93 lakhs received towards leaserent and Rs.13.24 lakhs being part of the amount spent by thepetitioner in respect of the Scheme. 17. According to respondents 1 and 2, the petitioner has notdone anything in furtherance of the lease agreement and therefore, ithas no right to claim to run the business. Further, the petitionerhas not paid the lease amount regularly. As per the lease, thepetitioner was in enjoyment of the property nearly for 12 years and itwas only after the petitioner has expressed its willingness foramicable settlement, the amounts were directed to be settled to it, byreturn of 50% of the expenditure stated to have been incurred by thepetitioner. It is the specific case of the first and secondrespondents that the impugned orders cancelling the lease as well asgranting the property to the 6th respondent were made on the basis ofthe request of the petitioner only, since the petitioner wanted tohave amicable settlement. It is also denied that the petitioner isequally situated as that of M/s.Jenneys Residency Private Limited onthe basis that it has put up the construction as per the agreement.18. It is the further case of the respondents that theproperty originally belonged to the Coimbatore Medical College and wastransferred in the name of first respondent. The Medical College hasrequested the property back since the College objected to theformation of an I.T. Park in the property belonged to the MedicalCollege and in those circumstances, the Managing Director of M/s.ELCOThas identified the property leased out to the petitioner as well asother 5 acres of land given to M/s.Jumhao's Entrepreneurs to beresumed and given back to the Coimbatore Medical College. Therefore,it is now proposed to resume the lease land of the petitioner, whichhas already been cancelled by the impugned Government Order in G.O.(2D).No.20 Social Welfare and Nutritious Meal Programme Departmentdated 20.04.2005 and the lease land of M/s.Jumhao's Joys, forconstruction of Dental College. 19. It is the further case of the respondents that even thoughby G.O.Ms.No.111 Social Welfare and Nutritious Meal ProgrammeDepartment dated dated 29.04.1993, there was a proposal to establishAnnai Sandhya Children World, actually the property which was selectedfor the said purpose belonged to the Medical College, Coimbatore andthe concerned Department has never transferred the property in favour https://hcservices.ecourts.gov.in/hcservices/ of the Social Welfare Department at all and therefore, the propertyhas never vested with the Social Welfare Department. In thosecircumstances, the Government has decided to resume the lands allottedin favour of other people including the petitioner.20. It is the further case of the respondents that two demanddrafts sent by the petitioner for the value of Rs.15.28 lakhs towardsthe lease from 05.10.1994 to 04.10.1996 have been returned to thepetitioner. It is also their further case that the petitioner has notpaid the lease amount up to date. If really the intention of thepetitioner was to proceed with the project, they would have paid therent as on date. As per the judgement in the writ petition filed byM/s.Jumhao's Joys Park, in W.P.No.7652 of 1999, the DistrictCollector of Coimbatore has found that the 6th respondent was havingonly 6.70 acres out of 10 acres allotted, since the remaining 3.30acres was utilised by the Coimbatore Corporation for public road andafter finding that the land allotted to the petitioner can be given tothe 6th respondent, in order to avoid any contempt proceedings relatingto the judgement given in the case filed by M/s.Jumhao's Joys Park,the Government has cancelled the allotment of 5 acres of land to thepetitioner and allotted a part of the said land to the 6th respondent.21. It is also the case of the first respondent that as perthe lease deed, the construction should be completed within 12 monthsbut the petitioner has not completed the construction till date andthe petitioner has also failed to pay the lease rent up to date, andit was only thereafter, due to inability the petitioner has expressedits desire to have the settlement. It is the case of the firstrespondent that allotment of 3.30 acres of land to the 6th respondentfrom and out of the property which has been leased out to thepetitioner was only as per the direction of this Court. It is alsothe case of the first respondent that the property in possession ofCoimbatore Medical College has been identified for the purpose ofI.T.Park and when the College objected to the same and decided to takeaway the property, the petitioner had to give up its claim under thelease deed.22. Mr.P.R.Raman, learned counsel appearing for the petitionerwould submit that the impugned orders in these two cases have not beenserved on the petitioner and the petitioner came to know about thecancellation of lease, which was granted to it on 05.10.1994 for aperiod of 30 years, when it was revealed before the Court by thelearned Government Pleader on 27.04.2007 in the writ petition filed bythe petitioner in W.P.No.10786 of 2006, challenging the show causenotice issued by the first respondent dated 11.03.1998 and no orderswere passed in spite of repeated representations.23. It is his further contention that even the other impugnedorder, viz., G.O.Ms.No.31 dated 09.05.2005, by which the firstrespondent has taken away 3.30 acres of land which has been leasedout, from the petitioner to the 6th respondent, which fact came tolight only when the 6th respondent has filed an impleading petition in https://hcservices.ecourts.gov.in/hcservices/ W.P.No.13440 of 2006, filed by the petitioner challenging the G.O.(2D)No.20 dated 20.04.2005 and therefore, according to the learned counselfor the petitioner, patently, both the impugned orders are violativeof the basic principles of natural justice. The learned counsel wouldalso rely upon the judgement of the Division Bench of this Court inW.A.Nos.428 and 582 of 1999, which was relating to M/s.JenneysResidency Private Limited, who is similarly situated as that of thepresent writ petitioner, wherein it has been held clearly that theGovernment cannot claim that they have right to resume the lands whenthe lease has been given.24. He would also submit that in the letter dated 04.04.2002,the petitioner has stated that the lease for the period from04.10.1994 to 03.10.1999 at the rate of Rs.7.63 lakhs per year hasbeen paid and the return of the cheques was not accepted by thepetitioner at all. He would also submit that by subsequent letterdated 16.05.2002, addressed to the first respondent, the petitionerhas made it clear that the reason for not starting construction wasthe pendency of various cases and the petitioner has made it veryclear that the petitioner is in the hotel industry and it isinterested in proceeding with the construction after permission hasbeen granted by the concerned Departments, however, requested forreducing the lease rent. His contention is that by the letter dated14.05.2004, the petitioner has not surrendered its right of lease andthe petitioner has only explained that in spite of the fact that thelease was granted in the year 1994, no progress could be made due tothe pendency of several cases and in the said letter the petitionerhas made it clear that it is still interested in the project to beexecuted. According to him, since for the 10 years period thepetitioner was not allowed to enter into the lands due to variouscases and since the petitioner has incurred heavy expenditure of aboutRs.13.24 lakhs by way of construction and Rs.38.17 lakhs towards leaserent already paid and Rs.3.24 lakhs towards stamp duty apart fromRs.10 lakhs towards pre-opening expenses, it has made a request torefund the said amounts by stating that it will partially compensatethe loss incurred by the petitioner. According to the petitioner, itdoes not mean that the petitioner has surrendered the right of leaseand therefore, the impugned G.O.(2D)No.20 made on the basis of theletter of the petitioner dated 14.05.2004 is a total misnomer. 25. His further contention is that the defence raised by therespondents that the property has not been transferred to SocialWelfare Department in the inter-departmental transfer and therefore,the Social Welfare Department has no right to execute lease deed istotally a mockery of law and if there is a dispute among theGovernment Departments, it cannot be said that the lease executed willbecome inoperative. He would also submit that the impugnedG.O.Ms.No.31 dated 09.05.2005, has been passed only to avoid somecontempt proceedings at the hands of the said M/s.Jumhao's Joys Park. https://hcservices.ecourts.gov.in/hcservices/

26. He would also rely upon the judgement of the Supreme Courtin Teri Oat Estates (P) Ltd., vs. U.T., Chandigarh and Others [2004(2)SCC 130], to substantiate his contention that the resumption of landand forfeiture of money deposited by the lessee should not be resortedto in normal circumstances. The learned counsel would submit that itis the categoric case of the petitioner that both the impugned ordershave never been served on the petitioner and no opportunity has beengiven. He would also submit that the lease amount has been paid upto1998 and after 1998, when a show cause notice was issued, a reply wasmade and the cases have been pending in Court and till date on theexplanation submitted by the petitioner to the show cause notice, therespondents have not passed any order or communicated any such order,however, only from the impugned orders the petitioner came to know forthe first time that the transfer of land to Social Welfare Departmentitself is illegal and therefore the lease will become inoperative.It is his further contention that the 6th respondent has also paid therent only for one year. It is his submission that even when the thirdrespondent has sent a proposal to the first respondent dated20.05.2004, the first respondent has not passed any orders andcommunicated the same to the petitioner.27. On the other hand, Mr.R.Muthukumarasamy, learned seniorcounsel appearing for the 6th respondent would submit that while it istrue that the petitioner and the 6th respondent have been allotted thelands under the above said Scheme, out of 10 acres of land, which wasallotted to the 6th respondent, 3.30 acres was taken away by theCorporation for the purpose of formation of a road with the result,the 6th respondent was left with only 6.70 acres. In the writ petitionfiled by M/s.Jenneys Residency Private Limited, this Court has setaside the show cause notice for cancellation, which was confirmed inthe writ appeal. It is also his submission that the 6th respondent hasalso filed W.P.No.7652 of 1998, challenging the show cause noticedated 11.03.1998 and following the judgement given in W.P.No.5109 of1998 in respect of M/s.Jenneys Residency Private Limited, this Courtby order dated 30.12.2002 has set aside the said notice in respect of6th respondent also and therefore, 6th respondent's lease remains inforce as on date, whereas the petitioner has never challenged the saidshow cause notice at all.28. He would also submit that it was only at the instance ofthe petitioner the allotment given in favour of the petitioner hasbeen cancelled and the portion of the property given to the petitionerhas been allotted to the 6th respondent and there is no illegality inthe same. His further contention is that the petitioner has not evenpaid the lease amount after 1998 till date and therefore, he cannotclaim the right of continuation of lease.29. Mr.S.Veeraraghavan, learned Additional Advocate Generalappearing for respondents 1 to 5 would submit that it was only at theinstance of the petitioner, as per its letter dated 14.05.2004, acompromise was arrived at for payment of expenditure incurred by the https://hcservices.ecourts.gov.in/hcservices/ petitioner and the petitioner has never carried out the constructionat all and it is only a mutual compromise. According to him, being aparty to the mutual compromise and having fully known about theimpugned Government Orders passed, the petitioner now turns around andsays that it does not know about the impugned Government orders. Hisfurther submission is that the writ petitions are filed after longdelay and therefore, they are liable to be dismissed on the ground oflaches. His submission is that the writ petitioner has encashed theamount of Rs.15.26 lakhs and Rs.26.2 lakhs, which shows the intentionof the petitioner to accept the compromise.30. I have heard the learned counsel for the petitioner,respondents and perused the entire records.31. It is not in dispute that the third respondent on behalfof the first respondent has executed a lease deed in favour of thepetitioner on 05.10.1994 for a period of 33 years for the purpose ofputting up of a Five Star Hotel in an area of 5 acres allotted to thepetitioner. On the face of it, the contention of the learned counselfor the first respondent that the property originally belonged to theMedical College, Coimbatore and it has never transferred to SocialWelfare Department and therefore, the lease which was executed by thethird respondent in favour of the petitioner on the basis of thedirection of the first respondent will become invalid, has no basis.As rightly pointed out by the learned counsel for the petitioner,regarding the termination of lease in respect of a similarly situatedperson who has already come to this Court, the Division Bench has setaside the show cause notice of termination dated 11.03.1998.32. The observation of the Division Bench in W.A.Nos.428 and582 of 1999 dated 18.09.2000, is as follows:"16. The learned counsel for petitioner has alsoproduced Xerox copies of receipts issued by the secondrespondent Corporation. These show payments of the annuallease amount which have been received by the secondrespondent for the year ending 26.10.1997. A certificatehas been produced to show that the payment for the year1997-98 had been encashed. This is issued by the Bank. Sothe submission is, having received the lease amount, theState cannot say that the lease is non-est in law.17. At this stage, the appellant cannot be heard tourge that they have the right to resume the lands. Thevarious letters issued by the Secretary to Government,Social Welfare & Nutritious Meal Programme Departmentaddressed to the first respondent vie the impression thatthe procedure of transferring the land is complete or at anyrate MAHAM's execution of lease in favour of the firstrespondent was with the concurrence and approval of theGovernment. MAHAM is after all only an Undertaking of theGovernment and therefore, it's right to transfer propertiesin favour of third parties would have been done only withthe approval of the Government......." https://hcservices.ecourts.gov.in/hcservices/ That the present petitioner is not a party before the Division Benchitself is not sufficient for the first respondent to take action forpassing the impugned orders. Further, the Division Bench has alsoheld, of course, in respect of the writ petitioner therein, viz.,M/s.Jenneys Residency Private Limited, that the respondent hasreceived the lease for the period 1997-1998 and encashed the same andhaving encashed the same, the State cannot say that the lease is non-est in law. The Division Bench has further held that at this stage theGovernment cannot further urge that they have the right to resume theland, on the basis that the third respondent has executed the lease infavour of the petitioner therein only with the concurrence andapproval of the Government. The Division Bench has held," 20. It is made clear that we are quashing theGovernment's action with regard to the first respondent aloneonly because the first respondent had acted upon the promiseand incurred the heavy expenditure. If, as it is stated inthe letter dated 22.09.1996 by the Collector of Coimbatoreother two allotees have not taken any action pursuant to theacceptance of their tenders, the Government is free to takesuch action as it deems fit. ................."33. The main reasons for the Government in passing theimpugned G.O.(2D)No.20 dated 20.04.2005, which is impugned inW.P.No.13440 of 2006, by cancelling the lease granted to thepetitioner are that:(i)the transfer of land has not been taken place in favour of SocialWelfare and Nutritious Meal Programme Department and therefore, thefirst respondent has no right to issue lease in favour of thepetitioner and therefore, the Government has decided to resume theland; and (ii)that the writ petitioner has stated in the letter dated 14.05.2004that it is unable to run the business and therefore, requested theGovernment to refund the loss incurred towards expenditure andtherefore, taking the said letter into consideration by directingthe payment of Rs.15.26 lakhs towards lease rent; amount of Rs.22.93lakhs being the total value of three demand drafts sent by thelessee/petitioner towards lease rent; and an amount of Rs.13.24lakhs being part of the amount spent by the petitioner forimplementation of the Scheme, the Government cancelled the leasegranted in G.O.Ms.No.254 dated 22.09.1994.34. By G.O.Ms.No.254 Social Welfare and Nutritious MealProgramme (SW.V) Department dated 22.09.1994, the Government has infact permitted the third respondent, which is a Governmentorganisation to give an extent of 5 acres of land on lease to thepetitioner initially for a period of 33 years at the rate of Rs.7.63lakhs per annum on the conditions that may be finalised by the thirdrespondent. The operative portion of the Government Order is asfollows: https://hcservices.ecourts.gov.in/hcservices/ "5.The Government also approve the proposal of theManaging Director, Maham and Project Director, "MAHAM" togive an extent of "Five acres of land to M/s.The Kenilworth,Calcutta, the highest tenderer on lease for an initialperiod of 33 years (and renewable thereafter) at a leaserent of Rs.7.63 lakhs (rupees seven lakhs and sixty threethousand only) per annum. The conditions of standardpattern shall be concluded by the Managing Director,"MAHAM"."35. In fact, the third respondent has executed a lease deed infavour of the petitioner on 05.10.1994 under a registered document.On 11.03.1998, the first respondent has issued a show cause notice tothe petitioner stating the proposal of resumption of land on theground that the transfer of land to Social Welfare Department has notbeen done absolutely and therefore, the lease deed is inoperative. Itis relevant to point out that it is the only reason given in the showcause notice dated 11.03.1998. It is also not in dispute that asimilar show cause notices were given to other occupants includingM/s.Jenneys Residency Private Limited, who has approached this Courtby filing writ petition in which this Court has set aside the saidshow cause notice and also the 6th respondent.36. It is relevant to point out that even though thepetitioner has not challenged the show cause notice dated 11.03.1998,it has in fact filed W.P.No.19380 of 1998, forbearing the Governmentfrom dispossessing the petitioner under the said notice withoutoffering any reasonable opportunity to the petitioner before passingany final order in furtherance of the show cause notice dated11.03.1998 and in the said writ petition, this Court has held asfollows:"3. Taking into consideration of the said submission,though the prayer sought for as such cannot be granted, theGovernment is directed to give an opportunity to thepetitioner before passing order in the Show Cause Noticedated 11.03.1998 to satisfy the Government with respect totheir power to cancel the agreement. With the aboveobservation, the Writ Petition is disposed of. Consequently,W.M.P.No.30026 of 1998 is also closed."37. In fact, in furtherance of the said order and subsequentto the representation of the petitioner dated 07.07.2000, the firstrespondent has issued notice dated 26.03.2002 to the petitioner,calling upon it to appear for enquiry on 05.04.2002. The petitionerhas made further representations on 16.05.2002 and also on 21.04.2004,in which the petitioner has stated," However, due to various litigations in the Madras HighCourt, land could not be allotted to us for setting up of thestar hotel and we have lost considerable time, apart from https://hcservices.ecourts.gov.in/hcservices/ incurring expenses for the said hotel. For your kindinformation, the State of Expenditure incurred for the hotelproject at Coimbatore is enclosed. In view of the above, we state that:* In spite of huge delay and cost overruns for no fault ofus, we are still keen in the said hotel project atCoimbatore. * Since we have paid lease rent for consecutive five yearsw.e.f. 04.10.1994 without land being allotted to us in thelast 10 years, we would request the Government to adjust thelease rent already paid against lease rent payable by usafter obtaining peaceful possession of the said land.* As because 10 years of the lease period have alreadyelapsed without any benefit to the Company, we would requestthe Government to extend the lease period beyond 66 years.In case it is not possible to consider our above proposal, wewould request the Government to arrange refund of the leaserent already paid with interest."So, it is clear that in the said letter the petitioner has said thatit is still interested in the hotel project in the place allotted toit and it has paid rent for the land being allotted to it, nearly for10 years and sought for another 66 years of lease, however, in thestatement of expenditure, the petitioner has explained the amountsspent by it to the extent of Rs.54,86,307.25. Even then the firstrespondent has not passed any order on the explanation submitted bythe petitioner based on the show cause notice issued on 11.03.1998, asper the direction of this Court dated 12.02.1999. However, suddenly,based on the letter dated 14.5.2004, the first respondent is stated tohave passed the impugned G.O.No.20, dated 20.4.2005 cancelling thelease. Even though in the letter dated 21.4.2004, the petitioner hasmade it clear that it is interested in proceeding with the project,based on the letter dated 14.5.2004 the Government has come to aconclusion that the petitioner is not interested to continue, but itis willing for settlement of amounts spent. The said letter dated14.5.2004 is as follows: M/s.New Kenilworth Hotel Pvt. Ltd.,1&2 Little Russel StreetKolkata 700 071.India. 14.05.2007ToThe Secretary to GovernmentSocial Welfare & NMP DepartmentSecretariatChennai 600 009. https://hcservices.ecourts.gov.in/hcservices/ Madam,With reference to the meeting I had with you today regardingthe future of the Annai Sandhya project, I wish to bring thefollowing points to your kind notice:a) That a tender notice for the land in considerationwas published in "THE HINDU" newspaper dated 03.08.1994 towhich our company applied after scrutinizing all relevantdetails, necessary particulars and payments terms.b) That we were selected by the Government based onour credentials and tender submitted and no time were anyspecial favours or bribed/commissions paid to any official orperson concerning regarding the above project.c) That after the lease deed was executed our companywas ready to start and comply with all the formalities asstated in the lease deed to start the above project.d) That due to various litigations in the Madras HighCourt we were unable to proceed with the project even thoughour company continued to pay the lease amount as mentioned inthe agreement.Subsequent of Court direction Government asked our viewsabout continuing the project. I replied in my letter dated16th May, 2002, and stated that in spite of huge delay andcost overruns, we are still interested in reviving theproject as per the original lease deed executed. Werequested the Government to reduce the lease rent for thesubsequent period payment as we have not been able to haveany benefits in the last 10 years as we were not allowed toenter the land due to various litigations in the Madras HighCourt.In reply to our letter, the Government turned down theproposal stating that it is not possible for the Governmenteither to reduce the lease rent in future or extent the leaseperiod. In view of that we are willing to have a reasonablesettlement with the Government.We have incurred heavy loss by way of constructionexpenditure of about Rs.13.24 lakhs, loss of revenue duringthe period of litigation, the lease rent already paid so faramounting to Rs.38.17 lakhs, Rs.3.24 lakhs incurred towardsstamp duty and Rs.10 lakhs incurred towards pre-openingexpenses (statement of expenditure enclosed). We requestthat the amount may kindly be refunded to us which willpartially compensate the loss incurred. This will result inan amicable settlement. https://hcservices.ecourts.gov.in/hcservices/ Hoping to hear from you soon,Yours faithfully,Sd/..... (RAJU BHARAT)"38. By construing the said letter, it is clear that theimpugned order was passed by the Government on 20.4.2005 fortermination of lease on the sole basis that the petitioner hasaccepted and is willing to surrender the lease. However, therepresentations made by the petitioner throughout including the onedated 14.4.2004 relate to the plea of the petitioner for extension oflease and also for reduction of lease rent. It is seen that in spiteof the order passed by this Court on 12.9.1999 in W.P.No.19830 of 1998directing the first respondent to give opportunity in respect of theshow-cause notice dated 11.3.1998 and pass orders, the firstrespondent has not chosen to pass any orders nearly for a period ofsix years from the date of receipt of the order of the Court.However, suddenly, the first respondent has taken into account theletter of the petitioner dated 14.5.2004 and passed the impugnedorder, that too, after one year, viz., on 14.5.2005. It is thecommon knowledge that even assuming that the letter of the petitionerdated 14.5.2004 is an offer made by the petitioner for the purpose ofsurrendering the lease on payment of the amount claimed by thepetitioner, it is not as if the first respondent has accepted theentire offer made by the petitioner. A reference to the impugnedorder in paragraph 6(iv) shows that when the petitioner has claimed tohave spent Rs.26.48 lakhs, half of the amount viz., Rs.13.24 lakhsis directed to be paid unilaterally. That being the case, it cannotbe said that it amounts to mutual settlement by compromise. In anyevent, a reading of the letter of the petitioner dated 14.5.2004 doesnot show that the petitioner was willing to surrender lease. 39. It is pertinent to point out that it was due to the reasonthat in spite of the direction given by this Court dated 12.2.1999 inW.P.No.19830 of 198, the first respondent has not passed any order,the petitioner has filed W.P.No.10786 of 2006 and at the hearing ofthe said writ petition, the impugned G.O.No.20 dated 20.4.2005 wasproduced before the Court in April 2006. There is no explanation fromthe first respondent as to what happened between the date ofrepresentation of the petitioner namely, 14.5.2004 and the impugnedorder dated 20.4.2005 and why such order has not been communicated tothe petitioner till 26.4.2006. The stand taken by the firstrespondent that the first respondent is not competent to issue thelease in favour of the petitioner since the first respondent has nottaken possession from the Medical College, Coimbatore is strange.The Supreme Court in Teri Oat Estates (P) Ltd., vs. U.T., Chandigarhand others [2004 (2) SCC 130], while referring to (Development andRegulation) Act, 1952, held that it is the duty of the Government toestablish the dishonest intention or motive on the part of theallottee in not making due payments. The Supreme Court held asfollows: https://hcservices.ecourts.gov.in/hcservices/ "57. We may, however, hasten to add that we do not intend tolay down a law that the statutory right conferring the rightof the respondent should never be resorted to. We havemerely laid down the principle giving some illustrationswhere it may not be used. There cannot be any doubtwhatsoever that if the intention of the allottee is dishonestor with an ill motive and if the allottee does not make anypayment in terms of the allotment or the statute with adishonest view or any dishonest motive, then Section 8-A canbe taken recourse to."In view of the same, I have no hesitation to come to the conclusionthat G.O.No.20 dated 20.4.2002 challenged in W.P.No.13440 of 2006 hasno legal basis to stand and it is liable to be set aside.40. In W.P.No.46153 of 2006 the impugned G.O.No.31 dated9.5.2005 passed by the first respondent alleges that 3.30 acresoriginally given to the petitioner under the lease is given to the 6threspondent on the basis that the 6th respondent who was also givenlease in respect of 10 acres of land had to loose 3.30 acres of landby the action of the Corporation in taking that portion of theproperty for laying road and therefore, the first respondent hasdecided to give an extent of 3.30 acres from and out of the land takenfrom the petitioner. This order is passed on the basis that thelease granted to the petitioner has been terminated. Even assumingthat the 6th respondent has lost a portion of the property given onlease by the first respondent, when the first respondent has taken astand in the impugned order challenged in the previous writ petitionthat the first respondent has never been vested with the property bythe Medical Department and the first respondent who is not inpossession has no right to execute the lease in favour of thepetitioner, it is not known as to how the same stand will not applyto the 6th respondent, for, it is not in dispute that the entire extentof land has been allotted by the first respondent, Social WelfareDepartment to the third respondent to give lease to the petitionerand other persons including the 6th respondent. While the firstrespondent has taken a stand for cancelling the petitioner's leasethat the first respondent has not been given legal possession, thatyardstick is equally applicable to the 6th respondent. I have alreadyset aside the termination of lease entered between the petitioner andthe third respondent and therefore, the present G.O.No.31 dated09.05.2005 has to be necessarily set aside, as the stand taken by thefirst respondent for allotting 3.30 acres of land in favour of the 6threspondent has no legal basis. In view of the same, theimpugned G.O.No.31 dated 09.05.2005, is also liable to be set aside. https://hcservices.ecourts.gov.in/hcservices/ Consequently, both the writ petitions stand allowed. No costs.Connected miscellaneous petitions are closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarkhTo1.The Secretary to the Government, State of Tamil Nadu Social Welfare and N.M.P.(SW-V) Department, Fort St.George, Chennai 9.2.The Secretary to the Government, State of Tamil Nadu Revenue Department Fort St.George, Chennai 9.3.The Managing Director Tamil Nadu Corporation for Development of Women Limited (MAHAM) Government of Tamil Nadu undertaking No.100, Anna Salai Guindy, Chennai 600 032 4.The District Collector District Collectorate Coimbatore 641 018.5.The Member Secretary Coimbatore Local Planning Authority Corporation Commercial Complex Coimbatore 641 018.1 cc To Mr.P.R.Raman, Advocate, SR.11195.2 cc To Mr.S.Udayakumar, Advocate, SR.11140, 11141.1 cc To Mr.I.Paranthaman, AGP, SR.11828. W.P.No.13440 & 46153 of 2006KSK(CO)RVL 05.03.2008