The court emphasized that unilateral alterations to established lease terms infringe upon contractual rights and due process, reaffirming the need for transparency in public sector dealings.

ORDER :

1. The instant writ petitions, by the petitioners all of whom are lessees of plots situated in the Bhilai Steel Plant Township. The petitioners’ assail the demands made by the respondent, Steel Authority of India Limited (SAIL), comprising the so-called “applicable Land Premium” on the ground of unilateral demands as well as excessive ground rent and service charges purportedly applicable at the time of lease renewal. The petitioners seek a direction to the respondents to renew their leases strictly in accordance with the original lease deeds and to restrain the respondents from imposing arbitrary charges issued by the Steel Authority of India Limited (SAIL) for renewal of lease deeds executed in favor of the petitioners more than three decades ago. The controversy touching upon contractual sanctity, fairness in administrative action and the interplay between Central undertakings and State policies, warrants a composite adjudication. Thus, these writ petitions, heard analogously, raise common questions of law and fact concerning the legality of the offer/demand letters dated 01.04.2025.

BRIEF FACTS OF THE CASE

2. The undisputed factual matrix is that under the Union of India’s Second five Year Plan (1955), the Bhilai Steel Plant was established in collaboration with the Russian Government. The then State of Madhya Pradesh agreed to provide facilities, including land acquisition for the project.

3. Pursuant to an agreement between the Union and the State (1958) lands were compulsorily acquired with a stipulation that any transfer of land to private persons would require the concurrence of the State Government. In furtherance therefore, residential-cum-commercial plots in Bhilai Township were allotted by SAIL to individuals, including the petitioners or their predecessors through registered lease deeds of 33 years duration (1989-1991). the lease deeds contained clear stipulations:

A one time premium was paid at the inception of the lease;

An annual ground rent and service charge were agreed;

Upon renewal, the ground rent could be enhanced by not more than 50% of the prevailing rent.

No other charges such as fresh premium or service levy were envisaged at the stage of renewal.

4. The petitioners, long standing occupants and lawful lessees applied for renewal of their leases upon expiry. Instead of a renewal on contractual terms, they were served with the impugned offer/demand letters dated 01/04/2025 demanding exorbitant sums under heads of “Applicable Land Premium”, “Service Charges” “Ground Rent” and “Security Deposit” calculated on land valuations without consultation with the petitioners by respondent No.1. As per the BSP for SAIL, it has issued offer letter dated 01.04.2025 and for renewal, following charges has been shown:

The petitioners or their predecessors-in-title were allotted plots in the Bhilai Steel Plant Township under registered lease deeds executed in 1982 to 1995 for a period of 30/33 years. The relevant terms of the lease deed are:

i. Enhancement of ground rent at the time of lease renewal shall not exceed 50% of the existing rent;

ii) No other charges, including lease premium or “renewal charges’, are payable

iii) the lease deeds bind the parties to the conditions and obligations stipulated therein.

5. The Union of India, in furtherance of the Second Five Year Plan conceptualized the establishment of the Bhilai Steel Plant, with land being transferred by the State Government of Madhya Pradesh under conditions requiring prior approval of the State for any lease or transfer to private parties. These historical conditions remain binding and relevant to the present disputes. In complete disregard of these conditions, respondent No.1 during its Board meetings held on 21.07.2008 and 25.07.2008, introduced a new term, the “Applicable Land premium”, to be levied on all plots for lease renewal including plots already allotted.

6. The District Collector, Durg vide letter dated 31.07.2019 unequivocally clarified that :

i) Any p