The main legal point established in the judgment is that the Nagpur Municipal Corporation was not permitted to incorporate additional terms and conditions in the lease-deed while renewing it, and the petitioners were not estopped from challenging the insertion of additional terms and conditions in the renewed lease-deed.

JUDGMENT :

A.S. Chandurkar, J.

1. The challenge raised in this writ petition filed under Article 226 of the Constitution of India is to the insertion of fresh terms and conditions while renewing lease of land in a manner contrary to the law laid down by this Court. Further challenge is raised to the demand notice issued by the Estate Officer, Nagpur Municipal Corporation demanding transfer fees from the petitioner nos.1 to 10 consequent upon transfer of the leasehold land to the petitioner no.11 as being without any authority of law.

2. It is the case of the petitioner nos.1 to 10 that on 10.07.1935 a permanent lease of Plot no.68 admeasuring 8400 square feet was executed in their favour by the then Municipal Committee of Nagpur. The said lease was thereafter renewed in the year 1964 for a period of thirty years. Though the said lease was liable to be renewed from 01.04.1994 but no steps in that regard were immediately taken. Ultimately, on 02.04.2009 the said lease was renewed for a period of thirty years from 01.04.1994 to 31.03.2024. While renewing that lease the lessor – Municipal Commissioner, City of Nagpur added certain terms and conditions that were not existing in the original lease-deed dated 10.07.1935. Clause (i), (j) and (k) are three of the clauses that were inserted while renewing the said lease and the same read as under:-

“(i). The Lessee shall not assign, transfer, alienate, sub-divide or sub-lease the demised land or any part thereof without the previous consent of the Lessor or such authority as may be appointed for that purpose. The Lessor however reserves its right to grant/refuse such permission and resume the land and the standing structure thereon without payment or any compensation. Provided that in case the Lessor decides to grant permission to assign, transfer, alienate, sub-divide or sub-lease the demised land, it shall do so after recovery of the unearned income fixed as per NMC Rules and Govt. Rules framed from time to time in this behalf.

(j). The Lessee, if without the written consent of the Lessor, assigns, sale, transfer, alienates or sub leases the demised land or any part thereof, on presently prevailing cost of the land/premises, the Lessee shall be liable to pay the Unearned Income and penalty as per NMC & Government Rules and as valued by office of the town planner and valuation department on presently prevailing cost of the land/premises of actual cost received by Lessee whichever is higher to the Lessor to get the lease regularized in favour of the assignee or the transferee, failing which the Lessor shall be free to enter upon the said land and repossess it, as if this demise had not been made, after giving notice of 30 days to that effect.

(k). The Lessee, if without the written consent of the Lessor subdivides the demised land into parts and sales any of the part thereof, he shall be liable to pay the charges as per N.M.C. & Government Rules and as valued by the Office of the town planner and valuation department on presently prevailing cost of the land/ premises of actual cost received by Lessee whichever is higher to the Lessor to get the lease regularized in favour of the transferee, failing which the Lessor shall be free to enter upon the said land and repossess it as if this demise had not be made, after giving notice of 30 days to that effect.”

In the meanwhile on 16.03.2009 petitioner nos.1 to 10 entered into a Memorandum of Understanding with the petitioner no.11 seeking to transfer the leasehold rights in favour of the petitioner no.11. When the petitioners approached the Nagpur Municipal Corporation seeking mutation of the name of the petitioner no.11, a demand of transfer fees of an amount of Rs.20,85,517/- was raised. This demand of transfer fees was based on Resolution no.336 dated 25.11.2008. Being aggrieved by the fact that transfer fees were being sought pursuant to insertion of fresh clauses while renewing the subsisting lease, the petitioners have challenged the same i