1. Sand excavation lease — Expiry of term — Cancellation and subsequent restoration orders — Intervention of third-party rights. (Para 3 )
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1997 Supreme(SC) 159
1997(2) Supreme 604
SUPREME COURT OF INDIA
K. Ramaswamy and G.T. Nanavati, JJ.
Subhash Chandra Chaudhari & Ors. -Appellants
versus
Ram Milan & Ors. -Respondents
Civil Appeal No. 694 of 1997
(Arising out of SLP (C) No. 16176 of 1996)
Decided on 31-1-1997
Counsel for the Parties :
For the Appellants : Anis Ahmed Khan and W.A. Nomani, Advocates.
For the Respondents : Yogeshwar Prasad, Sr. Advocate, R.C. Verma, R.B. Misra and Anil Kr. Gupta-II, Advocates.
Important Points
The Court held that a lease period cannot be extended to compensate for time lost due to legal disputes if third-party rights have already intervened. Consequently, the appeal was dismissed, and the respondent-Government was directed to refund the deposited amount.
Subject
Contract Law - Lease
Act Referred
Headnote
LEASE-Granted for one year to the appellants-Cancelled by Commissioner after about two months-Third parties inducted to execute the work pursuant to direction of High Court-Though appellant could ask for extension of time to execute the lease and work out the lease for residue period, since third party rights had intervened, in their absence no direction could be given-Respondents directed to refund the amount deposited by appellants. (Para 3)
Legal Category Hierarchy
Table of Contents
2. Extension of lease period — Claim for residue period due to inability to utilize lease term following administrative and judicial orders. (Para 3 )
3. Extension of lease period not feasible where third-party rights have already intervened and those parties are not before the court. (Para 3 )
4. A lease period cannot be extended for a residue term if third-party rights have intervened and the affected parties are not before the court. (Para 3 )
5. Appeal dismissed — Direction to refund the deposited amount. (Para 3 , 4 )
6. Can a lease period be extended if the lessee was prevented from utilizing the term by administrative or judicial orders?
The court observed that while there may be merit in seeking an extension for the residue period when a lease was not fully utilized due to court or administrative orders, such a direction cannot be granted if third-party rights have already intervened. (Para 3 )
7. What is the effect of third-party rights on the restoration of a lease term?
Where third-party rights have intervened and those parties are not before the court, the court cannot direct the extension of the lease to allow the original lessee to work out the residue period. (Para 3 )
ORDER
Leave granted. We have heard learned counsel on both sides.
2. This appeal by special leave arises from the judgment dated May 24, 1996 passed by the High Court of Allahabad in W.P. No. 8654/95.
3. The admitted position is that though lease was granted to the appellants on December 5, 1994 for one year and was executed, as admitted by the respondents, on the said date, it expired on December 5, 1995. It is contended that the lease granted to the appellants was cancelled by the Commissioner on February 17, 1995 and on a revision filed by the appellants to the State Government, by order dated March 23, 1995, the order of the Commissioner was set aside. But unfortunately the operation of the order of the Government was stayed by the High Court on May 21, 1995 and it set aside the order of the Government by the impugned order. It is not in dispute that pursuant to the direction of the High Court the auctions were conducted the third parties have been inducted to work out the excavation of the sand; but they are not before us. Though there is some force in the argument of the learned counsel for the appellants that since the working of the period of the lease granted to the appellants was not allowed to be fully utilised on account of the orders passed by the courts or the Commissioner, the time may be extended for the appellants to execute the lease and work out the lease for the residue period, as stated earlier, since the third party rights have already been intervened, in their absence we cannot give the direction as sought for. Under these circumstances, it is stated in the affidavit itself that the respondent-Government have offered refund of the amount deposited by the appellants as directed by the High Court. The respondents are directed to refund the amount of Rs. 6,30,000/-.
4. We are constrained to dismiss the appeal. No costs.
Appeal dismissed.
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