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IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.19585 of 2015 (An application under Articles 226 & 227 of the Constitution of India) M/s. Hanuman Enterprisers & others … -versus- Petitioners State of Orissa & others … Opposite Parties For Petitioners : Ms. P.Naidu, Advocate For Opposite Parties : Mr.P.K.Muduli, AGA Mr.G.Mukherji, Sr.Advocate for (OPNos.2 & 3) CORAM: HON’BLE DR. JUSTICE B.R.SARANGI HON’BLE MR. JUSTICE G. SATAPATHY DATE OF HEARING :09.04.2024 DATE OF JUDGMENT:16.04.2024 G. Satapathy, J. 1. M/s. Hanuman Enterprisers, which was represented by its sole proprietor-cum-original lessee Late Braja Sundar Dash and other petitioners, who are the legal representatives of such lessee in invoking the extra ordinary writ jurisdiction of this Court under Articles 226 & 227 of the Constitution of India by way of this writ petition have prayed to quash the order of cancellation of lease granted to W.P.(C) No.19585 of 2015 Page 1 of 21 original lessee by IDCO for land in Plot No. A/23 located in Chandaka Industrial Estate and order dated 04.09.2015 passed under Annexure-17 by which the appeal of the petitioners for revocation of cancellation of lease of M/s. Hanuman Enterprisers was rejected by Chief General Manager, MSME. 2. Briefly stated, the fact concerning the claim in writ petition are that in order to establish a Labour- Intensive Small Spices and Wheat Grinding Unit, Late Braja Sundar Dash who was the predecessor-in- interest of petitioner Nos. 2 to 5 had applied to Orissa Industrial Infrastructure Development Corporation (IDCO)-cum-OP No.2 for allotment of a piece of land in Chandaka Industrial Estate on lease. After due consideration of the said application and examining the viability of industrial unit, OP No.2 agreed to lease out a piece of land measuring an area Ac.0.103dec appertaining to IDCO Plot No. A/23 corresponding to Revenue Plot No. 6(3) of Khata No. 493 of Mouza Patia, Bhubaneswar in the year 2003 and a lease deed was executed between Late Braja W.P.(C) No.19585 of 2015 Page 2 of 21 Sundar Dash and OP No.2 which was registered on 16.10.2003 for a consideration of Rs.1,28,750/-. On the basis of said lease deed, Late Braja Sundar Dash applied to Bhubaneswar Development Authority seeking permission to establish the unit on the lease hold land and after obtaining sanction, the unit was established and functioned by providing work to many unemployed persons and the late proprietor was regularly paying rent, cess, electricity bill etc. for the unit. In the year 2007, the opposite party initiated a proceeding against the late proprietor Braja Sundar Dash vide EUO Case No. 107 of 2007 and passed
Decision
order therein cancelling the allotment/lease in respect of said land on the ground of delay in establishing the unit, but Late Braja Sundar Dash approached the Estate Court which on being satisfied by an order passed on 12.03.2010 recalled the order of cancellation of lease and the said proprietor Late Braja Sundar Dash deposited a sum of Rs.10,000/- towards processing fee for revocation of cancellation of lease, but unfortunately Braja Sundar W.P.(C) No.19585 of 2015 Page 3 of 21 Dash expired on 24.06.2011. According to the petitioners, since right in lease is heritable one, they succeeded to the lease hold property in terms of Clause-6 of the lease deed and they filed an application before OP No.3 enclosing all the documents praying to transfer the leasehold property in their favour. It is the further case of the petitioners that there was a death of a labour in the unit and since it was very difficult to run the unit, they had sought permission of the authority for establishing hotel, restaurant and computer servicing center along with spice and wheat grinding unit in the leasehold land for their sustenance, but unfortunately the Divisional Head, BCD-II, Bhubaneswar rejected their application for transfer of leasehold land by cancelling the lease vide an order passed on 10.01.2015 and upon receiving the notice of cancellation, the petitioners assailed the said order before this Court in W.P.(C) No. No. 2933 of 2015 wherein liberty was granted to the petitioners to file an appeal before the Competent Authority and the petitioners, thereafter, W.P.(C) No.19585 of 2015 Page 4 of 21 preferred an appeal before the Chairman-cum- Managing Director, IDCO by inter alia taking a ground that the order of cancellation of lease against a dead person is contrary to law, but said appeal was rejected by the Chief General Manager (MSME), Bhubaneswar vide an order passed under Annexure- 14. Challenging Annexure-14, the petitioners again approached this Court in W.P.(C) No. 7357 of 2015 which was disposed of by this Court with an order passed on 11.05.2015 by setting aside the order of rejection of cancellation of allotment of leasehold land and directed the Chairman-cum-Managing Director, IDCO to rehear the appeal of the petitioners afresh and decide the same by giving an opportunity of personal hearing to the petitioners in the matter. Upon personal hearing petitioner No.2, the Chairman- cum-Managing Director passed an order on 04.09.2015 under Annexure-17 rejecting the appeal on the ground that the land has not been utilized for industrial purpose for which it was leased out, which was the basis for granting of lease to the late W.P.(C) No.19585 of 2015 Page 5 of 21 proprietor. Feeling aggrieved with such order under Annexure-17, hence this writ petition by the petitioners. 3. In response to the notice of the writ petition, the State-cum-OP No.1 filed its counter affidavit stating inter alia that the issue involved in the writ petition is an interse dispute between the IDCO and the petitioners and the Industries Department has nothing to say about the claim of the petitioners. On the other hand, OP Nos. 2 & 3 by entering appearance have jointly filed their counter affidavit denying all the allegations made against them and inter alia challenging the claim of the petitioners mainly on the ground of utilization of lease hold land by the petitioners not for the purpose it was leased out and utilization of leasehold land contrary to the terms and conditions of lease deed. 4. In the course of hearing of writ petition, Ms. Pratyusha Naidu, learned counsel for the petitioners has forcefully submitted that cancellation of lease against a dead person is contrary to law, but the W.P.(C) No.19585 of 2015 Page 6 of 21 petitioners being the successors of deceased lessee have every right to inherit the leasehold land since lease is heritable, however, the IDCO Authority by exceeding its jurisdiction has cancelled the lease which was originally granted to the predecessor-in- interest of the petitioners for the purpose of establishing a Labour Intensive Unit and the deceased lessee had established the industrial unit, but without analyzing the facts and law, the IDCO Authority has cancelled the lease unilaterally by assigning irrelevant and untenable reasons. Ms. Naidu has further submitted that due to ill luck, the original lessee died of cancer on 24.06.2011, but not only such fact was intimated to the Corporation(IDCO), but also a petition was filed for transferring the allotment of leasehold land in favour of the petitioners who are the successors of original lessee Late Braja Sundar Dash and Clause-6 of lease agreement deed stipulates that on the death of original lessee, the title of the land would devolve upon the legal heirs of the deceased lessee and therefore, the petitioners W.P.(C) No.19585 of 2015 Page 7 of 21 being the LRs. had rightfully acquired the right, title and interest over the leasehold land on and from 24.06.2011 and therefore, the order of cancellation of lease for IDCO Plot No. A/23 and the order passed on 04.09.2015 by Chief General Manager MSMR in the appeal being unsustainable in the eye of law may kindly be quashed in the interest of justice. 5. Mr. P.K.Muduli, learned Additional Government Advocate has submitted that since the issue in the writ petition is an interse dispute between the IDCO and the petitioners on the basis of lease agreement, such dispute is required to be considered in terms and conditions of such lease agreement and the State would abide by the final decision that would be rendered by this Court in this writ petition. 6. Mr.Goutam Mukherjee, learned Senior Counsel appearing for OP Nos. 2 & 3 has assiduously submitted that it is the admitted case of the petitioners that the leasehold property was being used as a hostel without any permission from the IDCO and thereby, the petitioners having used the W.P.(C) No.19585 of 2015 Page 8 of 21 leasehold property in violation of terms and conditions of lease agreement are not entitled to inherit the leasehold property and therefore, the cancellation of lease by the Authority is lawful. Further, Mr. Mukherjee has submitted that on enquiry, since IDCO has learnt that a three storey building has been constructed by the petitioners on leasehold property without any approval and the same being used for residential purpose, it cannot be said that the leasehold property is being utilized in terms of the lease agreement and the lease in question being a contractual lease, the parties are bound by the covenants of such lease, but the covenants of such lease stipulate that in case of death of lessee, it was obligatory on the person to whom the title devolves to give a notice of such devolution within a period of three months(90 days) and the same having not done in this case, the petitioners cannot inherit such leasehold property. Further, it is submitted by learned Senior Counsel that since the lessee was not having any proprietary W.P.(C) No.19585 of 2015 Page 9 of 21 or absolute right over the land of the lessee, the petitioners have no right of inheritance in this case and all the lands leased by IDCO being the land of State Government, it is leased out strictly for the purpose of industrial use and thereby, IDCO reserves right to cancel lease or resume the land in the event the lease is mis-utilized. Mr. Mukherjee has further submitted that since the leasehold land was required to be utilized for specified purpose which was not having been achieved in this case, the lease of land was liable to be cancelled and the LRs. of the deceased having approached this Court in two writ petitions earlier challenging the order of cancellation of lease, but the petitioners having never taken the plea of cancellation of lease affected against a dead person to be untenable, they are now estopped/precluded from raising such a plea. In relying upon the decision in M.P. State Mining Corporation Limited Vrs. Sanjeev Bhaskar and Others; (2013) 12 SCC 326, Mr. Mukherjee has submitted that after death of original lessee, all rights W.P.(C) No.19585 of 2015 Page 10 of 21 of the original lessee would come to an end and his legal heirs were neither entitled to continue with lease nor for its renewal, since the lease in question is a contractual lease and therefore, no right is conferred upon the petitioners to continue with such lease. On the aforesaid submissions, Mr. Mukherjee has prayed to dismiss the writ petition. 7. A steady consideration of claim of the petitioners and resistance of OP Nos. 2 & 3 to such claim, keeping in view the rival submissions upon perusal of averments and documents put in by the parties on record, undeniably the interse disputes between the parties emanates from a lease, covenant of which are recorded and registered, which are found in the document under Annexure-2. Ordinarily, a lease refers to a contract where one party grants a right to use a property or land to another party in return for consideration and for a specified period of time. In a lease, generally both the parties entered into a lease agreement specifying the terms and conditions of the agreement, but one of the modes of W.P.(C) No.19585 of 2015 Page 11 of 21 determination of lease is by way of forfeiture which means cancellation of lease upon violation of an expressed condition which is embodied in the lease agreement. Since the lease is to be governed by its covenants, any dispute with regard to rival claims of the parties including cancellation of lease has to be decided by the contour of terms and conditions of such lease, which the parties must have entered into at the time of commencement of lease. The present dispute since being related to cancellation of lease and the main claim of the writ petitioners for cancellation of lease against a dead lessee being contrary to law, the relevant terms and conditions of the lease admittedly entered into by the parties in this case on 04.10.2003 which are extracted below would be apropos in adjudicating the dispute: Clause-6. “In the event of death, insolvency or liquidation of the lease, the person on whom the title devolves shall within 03 months of the devolution, give notice of such devolution to the Lessor. The person or whom the title devolves shall supply to the Lessor, certified copies of W.P.(C) No.19585 of 2015 Page 12 of 21 the documents evidencing the transfer of devolution. Clause-24. The lessee shall not at any time during the tenure of the lease acquire and absolute or exclusive Proprietory right over the land or claim any such right what so ever, expecting the rights to use the land and the said in the manner prescribed herein and incase of any transfer of land either in the usual course of inheritance or by rights of succession or by way of adverse possession and easement right of any third party as applicable against the land belonging to the Govt. or in case of an encumbrance created either voluntarily by the lessee or otherwise by an order of the Civil court, the limitations conditions and restrictions imposed in this deed of lease will apply “mutatis Mutandis” to any outsider claiming interest over the demised premised through the lessee and for such purposes or otherwise in constructing any of the terms in this deed of lease the provisions of the Govt. Grants Act, 1895 and the provisions of the Transfer of Property Act, 1882 will not be applicable.” 8. A plain reading of Clause-6 of the lease deed would go to disclose that on the death of the lessee, the person whom the title devolves shall within three months (90 days) of devolution, give notice of such devolution to the lessor and such person shall also supply to the lessor the certified copies of the document evidencing the transfer of devolution. It is W.P.(C) No.19585 of 2015 Page 13 of 21 although claimed by the petitioners at paragraph-11 of the writ petition that after death of original lessee Braja Sundar Dash, the lease property devolved upon petitioner Nos.2 to 4 and as such, an application was filed before OPNo.3 enclosing all documents praying to transfer the leasehold property in their favour, but the documents relied on by the petitioners in support of such claim under Annexures-10 and 11 reveal that the petitioners by letter under Annexure-10 had in fact requested on 06.12.2013 to the Manager, MSME for change of ownership of leasehold land in favour of petitioner Nos. 3 & 4 and the Manager (MSME) by a letter under Annexure-11 requested the Divisional Head, BCD-II, IDCO, Bhubaneswar for conducting field inspection and soliciting report of such field inspection. According to the petitioners’ admitted claim, the original lessee died on 24.06.2011, but on 06.12.2013 the petitioners approached the Manager, MSME, IDCO for the first time by Annexure-10 requesting for change of ownership of leasehold property in the favour of petitioner Nos. 3 & 4 which W.P.(C) No.19585 of 2015 Page 14 of 21 was after a gap of nearly two years and six months of death of the original lessee. Hence, the conditions as embodied in Clause-6 of the lease deed cannot be said to have been complied with inasmuch as the petitioners were supposed to give the notice within three months (90 days) immediate after the death of the original lessee on 24.06.2011. The claim as advanced by the petitioners in this regard is without any material or documents to say that they had approached the lessor in time complying the covenant of lease. 9. Admittedly, the leasehold land belongs to the State of Odisha which has been leased out the leasehold land along with other lands to IDCO for specific purpose of industrial uses only. It is also stated by the writ petitioners that the original lessee had been leased out with the leasehold land to establish a Labour Intensive Small Spices and Wheat Grinding Unit which is an industrial unit and such leasehold land has been leased out to original lessee by IDCO in its commitment for development and W.P.(C) No.19585 of 2015 Page 15 of 21 growth of industries in the State and therefore, the land in question was leased out for a specific purpose of developing a industrial unit, but the written statement put in by the petitioner Priya Ranjan Dash before CMD, IDCO on 28.05.2015 under Annexure-16 series, admittedly discloses that the building was put to use as hostel in 2014 and he had not obtained any permission for running hostel therein as well as he undertook to submit the purchase bills of plants and machinery procured by his late father within three days, however, the Petitioner No.4 Priya Ranjan Dash gave reply to the letter of Chief General Manager, MSME by way of separate letter dated 30.05.2015 that the purchase bills of plant and machineries of wheat and spice grinding unit are misplaced and no VAT registration certificate has been obtained. Subsequently, on 29.07.2015 the said Priya Ranjan Dash in order to cover up his own admission has submitted a memo to Chairman-cum-Managing Director, IDCO, Bhubaneswar indicating therein that they are not using the land for a hostel, but they are W.P.(C) No.19585 of 2015 Page 16 of 21 keeping ten to twelve persons temporary like a mess. Further, it is also found from Annexure-17 that the petitioners had submitted the approved building plan of the unit obtained from BDA, in which BDA had approved a plan for a single storey industrial building, but the petitioners were found to have constructed a three-storey residential building which is a deviation of approved building plan, no matter they were required to take approval of the authority for making any improvement or deviation in the building plan of the unit. Further, the admitted averments of the petitioners at paragraph-12 of the writ petition, the intension of the petitioners is palpable with regard to establishing hotel, restaurant and computer servicing center, but the covenant of lease does not provide for such use of leasehold property. It is also forthcoming from Clause-3 of the lease deed that lessee was required to construct a factory building and install the plant and machinery within twelve (12) months of execution of lease deed and go into commercial production within which eleven (11) months from the W.P.(C) No.19585 of 2015 Page 17 of 21 date of taking possession of the property, but no document or materials has been produced before this Court to evidence such fact. Further, for any construction or alteration or addition to the existing building and for any additional construction, the lessee shall have to submit the building plans and take up such construction, addition and alteration or additional construction only after obtaining approval of the lessor, but it was found from Annexure-17 that the petitioners have constructed a three storey residential building, but neither such assertion has been denied in the averments of the writ petition nor in the rejoinder to counter affidavit by the petitioners. It is also an admitted fact that the land was leased out by the IDCO for establishing spice and wheat grinding unit, which was embodied in the terms of the lease deed, but it appears from own admission of one of the petitioners namely Priya Ranjan Dash that the land leased out had been used for constructing a building which was running for the purpose of hostel W.P.(C) No.19585 of 2015 Page 18 of 21 in the year 2014 without any permission of the lessor. 10. It is not out of place to mention here that how the land would be assigned on death of the lessee has been well provided in the terms of the lease agreement which can be evidenced from Clause-6 of the lease deed, but the legal representatives of the original lessee could apply for change of ownership of the unit after near about two years and six months of the death of the original lessee in contravention of Clause-6 of the lease deed. In this regard, it is also considered apt to refer to the decision in M.P. State Mining Corporation Ltd. (supra) as relied on by Mr. Mukherjee, learned Senior Counsel, wherein the Apex Court at paragraphs-15 and 16 of the decision has held as under: “15. Further, in the year 1982 when the original lessee died, there was no provision for orders to continue the application for a mining lease. Legal heirs/representatives of the original lessee, if they wanted to continue the business or mining activity of the deceased and also if they had required qualification, could at best file an application for grant of fresh mining lease. Admittedly, W.P.(C) No.19585 of 2015 Page 19 of 21 legal heirs after the death of the lessee (7th September, 1982), first Respondent never applied for fresh grant of lease. It has also not been made clear that whether any one of them have required qualification for grant of mining lease. including the 16. In view of the aforesaid fact, we hold that after the death of the original lessee, Rajendra Nath Bhaskar, all rights come to an end and the first Respondent or any other legal heir(s) were neither entitled to continue with the lease nor entitled for renewal of lease.” 11. In view of the discussions made hereinabove and taking into consideration the failure of the petitioners to comply with Clause-6 of the lease deed and the admitted facts as furnished by the petitioner Priya Ranjan Dash under Annexure-16 that the building was put to use as hostel in 2014 without permission of IDCO for running of hostel therein, which is in statutory violation of covenants of lease, together with failure of the petitioners to produce any documents to support their claim that a industrial unit has been established in the leasehold premises, this Court does not consider the order passed by Chief General Manager, MSME vide Annexure-17 to be contrary to the lease agreement and thereby, W.P.(C) No.19585 of 2015 Page 20 of 21 rendering the claim of the petitioners for cancellation of lease of leasehold property further remained unsustainable and this Court, therefore, does not persuade itself to interfere with the order impugned in this writ petition as well as for cancellation of lease of the leasehold property. 12. In the result, the writ petition merits no consideration and is accordingly dismissed on contest, but no order as to costs. (G. SATAPATHY) JUDGE Dr. B.R. Sarangi, J. I Agree (DR. B.R. SARANGI) JUDGE Signature Not Verified Digitally Signed Signed by: KISHORE KUMAR SAHOO Designation: Secretary Reason: Authentication Location: High Court of Orissa Date: 16-Apr-2024 13:22:56 Orissa High Court, Cuttack, Dated the 16th day of April, 2024/Kishore W.P.(C) No.19585 of 2015 Page 21 of 21