The termination of a commercial license is justified if the licensee fails to adhere to stipulated contractual obligations, as it undermines public interest and lawfulness under the contract terms.

Judgment :

Uday Kumar, J.

1. The first appeal itself is taken up for hearing along with CAN 4 of 2022, an application for mandatory injunction directing the respondent to reconstruct the showroom of appellant after dismantling the boundary wall erected in the said shop, and to pay Rs. 2 crore 92 lakh and 29 thousand in compensation suffered due to loss of material equipment and other charges, injunction to restrain the respondent from interfering and or causing obstruction, disturbances in the peaceful possession of the petitioner in respect of Plot No. C-5 and interim orders.

2. This appeal, preferred by Haldiram Limited (the appellant), a company incorporated under the provisions of the Companies Act, 1956, challenges the judgment and decree dated December 22, 2014, passed by the Learned 5th Judge (Senior Division), Alipore. The trial court dismissed the appellant's suit, which sought to declare the allotment orders dated March 6 and 7, 2003 valid and binding, to declare the termination order dated January 8, 2008 illegal, and to obtain a perpetual injunction restraining the respondent/defendant from interfering with its rights.

3. The legal dispute between the appellant and the Kolkata Metropolitan Development Authority (KMDA), revolves around the termination of a licence for a commercial plot issued to it by the process of tender.

4. The factual matrix of this case is largely undisputed. On January 10, 2003, the Kolkata Metropolitan Development Authority (KMDA) issued a Notice Inviting Tender (NIT) for a plot of land measuring 121.903-cottah situated in East Kolkata, opposite to Ruby General Hospital on the Eastern Metropolitan Bye-Pass, for the institutional/commercial/ mixed-use purposes, offering it on a 99-year leasehold basis with an option of subleasing. The appellant was declared the successful bidder on January 24, 2003 and, in compliance with the tender, deposited the full premium.

5. Subsequent discussions revealed that KMDA's title to the land was not clear. Accordingly, KMDA executed an interim "Deed of Licence" on March 22, 2003 in favour of the appellant. This deed, crucially, contained Clause 7(iv), which explicitly stated that a 99-year lease would be granted to the appellant upon KMDA's acquisition of a clear title. The appellant took possession and initiated construction-related activities.

6. The appellant alleges that its efforts were stalled by KMDA’s failures, including a delay in providing a revised site plan and its failure to clear pre-allotment municipal tax arrears. Despite these impediments, KMDA issued a show-cause notice on December 31, 2007, citing construction delays.

7. The appellant argues that it submitted a detailed response on January 8, 2008, attributing the delays to KMDA's own inactions. However, KMDA terminated the license on the same day, without considering the response of appellant. Later, it offered a partial refund of Rs.7.48 crores, ignoring Haldiram’s substantial additional investments of over Rs.3 crores. This action triggered Haldir