30-Year-Old Lease Deed Based on Long Possession Cannot Be Cancelled For Non-Disclosure Under S.73-B of Rajasthan Municipalities Act: Rajasthan High Court - 2025-09-08

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Rajasthan HC: 30-Year-Old Lease Cannot Be Arbitrarily Cancelled Under S.73-B; Power Must Be Used Reasonably

Jodhpur: The Rajasthan High Court, in a significant ruling, held that a perpetual lease deed ('patta') granted three decades ago on the basis of long and undisputed possession cannot be cancelled by a municipal authority under Section 73-B of the Rajasthan Municipalities Act, 2009, merely on the grounds of a non-disclosure by the allottee. Justice Kuldeep Mathur, while partly allowing a batch of writ petitions, emphasized that the power of revocation must be exercised within a "reasonable time" and cannot be used to unsettle rights that have attained finality over a long period.

The court, however, declared any construction undertaken by the petitioners beyond the originally leased area of 99 square yards as illegal, refusing to grant relief for its regularization.

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Background of the Dispute

The case involved a series of writ petitions filed by Fateh Mohammad and his grandsons against the Municipal Board of Nohar, Hanumangarh. The petitioners challenged orders passed by the Executive Officer of the Municipal Board cancelling a perpetual lease deed dated April 4, 1994, and subsequent notices for demolition and seizure of their property.

The petitioner, Fateh Mohammad, contended that his family had been in possession of the ancestral property since 1965. In 1994, the Municipal Board regularized his long-standing possession and issued a perpetual lease for 99 square yards. Decades later, in 2022, after obtaining valid construction permission, he gifted the property to his grandsons, who built a residential-cum-commercial structure.

Trouble began in 2025 when the Municipal Board issued show-cause notices alleging that the 1994 lease was obtained fraudulently. The board cancelled the lease, claiming Mohammad had falsely declared in an affidavit that he did not own any other property within municipal limits, while he already possessed another plot.

Arguments from Both Sides

Petitioner's Arguments:

- Mr. Moti Singh, representing the petitioners, argued that the lease was granted after due procedure under the Rajasthan Municipality (Urban Land Disposal) Rules, 1974, by regularizing old possession.

- He contended that the power to cancel a 30-year-old lease deed could not be exercised arbitrarily by the same authority that granted it, especially when the possession was never in dispute.

- It was also submitted that the proceedings were initiated with malicious intent, as Fateh Mohammad had filed complaints against the current Chairman of the Municipal Board.

Respondent's Arguments:

- Mr. Rajesh Panwar, Additional Advocate General, argued that the lease was procured through misrepresentation of material facts, as the petitioner concealed his ownership of another plot.

- He stated that the Executive Officer rightly exercised powers under Section 73-B of the Act of 2009, which allows for revocation of allotment obtained through misrepresentation or false documents.

- The respondents highlighted that the petitioners sought construction permission for 197.5 square yards, nearly double the leased area of 99 square yards, based on a legally unenforceable family settlement.

Court's Analysis and Judgment

Justice Kuldeep Mathur observed that while Section 73-B of the Act does not prescribe a limitation period for its exercise, the power must be used within a reasonable time, guided by principles of equity and justice.

The court made a crucial distinction between fraud and non-disclosure in this specific context. It noted:

"This Court finds that since the uninterrupted and peaceful possession of the petitioner’s family over the disputed piece of land remains uncontroverted, the mere non-disclosure of fact of having possession of another plot cannot be the sole reason for cancellation of the perpetual lease deed and patta issued in his favour after thirty years."

The judgment emphasized that once an order granting a benefit is allowed to stand for a long time, the recipient is entitled to assume the matter has attained finality. The court held that the petitioner had not played any "fraud" upon the Municipal Board, as the primary basis for the lease was the family's undisputed possession of the land for over 60 years, a fact the respondents did not contest.

However, on the issue of construction over an extended area, the court sided with the municipality. It ruled that a family settlement or Memorandum of Understanding cannot be treated as a legally valid title document for seeking construction permission on municipal land. Therefore, the construction beyond the 99 square yards covered by the 1994 lease was declared illegal.

Final Decision

In its final order, the High Court:

1. Partly allowed the writ petitions.

2. Quashed and set aside the order dated 18.07.2025 that cancelled the perpetual lease deed of 1994 for the 99 square yard plot.

3. Declared the construction raised by the petitioners beyond the 99 square yard area as illegal and declined to order its regularization.

4. Granted liberty to the petitioners to approach the competent authority for allotment and regularization of the additional land in accordance with the law.