IN THE HIGH COURT AT CALCUTTA
RAI CHATTOPADHYAY, J.
Indranil Roy & Anr. – Appellants
Versus
The State of West Bengal & Ors. – Respondents
W.P.A No. 20888 of 2016
Decided on : 04-03-2024
lease deed - breach of lease terms - Clause 2(6)(a), Clause 4 - The court discussed the breach of lease terms under Clause 2(6)(a) and the consequences under Clause 4 of the lease agreement. It highlighted the authority's power to terminate the lease in case of breach and the requirement to serve a notice before termination.
Fact of the Case:
The original writ petitioner, now deceased, entered into a lease agreement to hold land for manufacturing machinery parts. The authority terminated the lease due to the petitioner's failure to construct a building within the stipulated period.
Finding of the Court:
The court found that the authority's decision to terminate the lease was in accordance with the terms of the lease agreement and upheld the orders of the respondent authority.
Issues: Breach of lease terms, authority's power to terminate lease, notice requirement before termination
Ratio Decidendi: The court held that the authority had the power to terminate the lease in case of breach and was required to serve a notice before termination, which was found to have been fulfilled.
Final Decision: The writ petition was dismissed, and the orders of the respondent authority were upheld.
JUDGMENT :
Rai Chattopadhyay, J.
1. The original writ petitioner had died on July 3, 2020, during pendency of the present writ petition. The legal heirs of the original petitioner (since deceased) have been substituted in place of their deceased father, as the substituted writ petitioners in this case.
2. The writ petitioner has challenged the impugned order of the Special Secretary to the Government of West Bengal, Urban Development Department dated July 5, 2016. The said order is extracted as herein below:-
The possession of the plot is vested in the Urban Development Department.
Therefore, the question of reconsideration of the matter does not arise.”
3. The factual background of the case in brief, resulting into issuance of the said order by the authority dated July 5, 2016 and filing of the present writ petition may be stated as herein below:-
4. A lease agreement was entered into by one M/s. Roy & Company, with the Governor of the State of West Bengal, on September 4, 2009. The original writ petitioner (since deceased) was the proprietor of said M/s. Roy & Company. The lease was entered into to enable the writ petitioner (since deceased) as the proprietor of the said company, to hold the land, to erect a building thereon for use for manufacturing machinery parts.
Since after delivery of possession of the said land to the writ petitioner (since deceased), the land was demarcated with the boundary pillars, by the said original writ petitioner and thus since then he has been enjoying the possession and right over the said property, in terms of the lease deed as mentioned above.
The writ petitioner appointed constituted attorney vide a general power of attorney dated June 2, 2016, in order to arrange labour, engineers, supervisors, electricity personnel, waterline personnel and all other personnel for installations, fittings, amenities and obtain services from the appropriate authorities, as and when required. It is stated that on November 26, 2015, the original writ petitioner wrote to the Principal Secretary, Urban Development Department that he could not construct the building within the stipulated period as specified in the lease deed, due to the reason of his ill health and infirm financial condition. By dint of the said letter the original writ petitioner had sought for extension of the period for starting construction over the said piece of land, for at least another five years, from the date of the said letter.
On the same date, i.e. November 26, 2015, a show cause notice was issued by the Special Secretary to the Government of West Bengal to the writ petitioner (since deceased). The crux of the letter as above would be that by not constructing the building within the stipulated time of three years, as envisaged under Clause 2(6)(a) of the said lease deed, the writ petitioner (since deceased) had breached the agreed terms and conditions of lease. As such, he would be covered under cancellation clause of the lease deed, due to breach of the mutually agreed terms and conditions for construction within a stipulated period of time. An explanation was sought for as to why the Government shall not seize the said plot of land, for violation of Clause 2(6)(a) of the lease deed.
On January 25, 2006, is the reply of the erstwhile writ petitioner (since deceased) to the show cause notice, issued to him, in which he had reiterated the ground of his indisposition and prayer for permission for extension of time for constructing the building.
The authority sent its reply vide letter dated March 14, 2016, thereby holding that the clarification given by the erstwhile writ petitioner (since deceased) was not satisfactory and acceptabl
The authority has the power to terminate a lease in case of breach, and a notice must be served before termination.
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The court established that acceptance of delayed payments by the State constituted a deemed extension of time for contract performance, reinforcing the obligation to execute lease deeds.
The power of resumption under the Chandigarh Lease Hold of Sites and Building Rules, 1973 should be used as a last resort to ensure planned and regulated urbanization.
The authority to cancel a lease lies solely with the government, and any cancellation must adhere to principles of natural justice, including providing the lessee an opportunity to be heard.
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