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2025 Supreme(Online)(Cal) 1685
CALCUTTA HIGH COURT
Debangsu Basak, Md. Shabbar Rashidi, JJ
Star Abasan Private Limited – Appellant
Versus
The State of West Bengal – Respondent
M.A.T. 2021 of 2023
For the Appellants/Petitioners: Mr. Mainak Bose, Sr. Adv., Mr. Anuj Singh, Mr. V.V.V. Sastry, Mr. Anirudh Goyel
For the Respondents: Mr. T.M. Siddiqui, Ld. A.G.P., Mr. Suddhadev Adak
The court upheld the validity of an arbitration award and affirmed that actions taken by the State in terminating the lease due to breach were lawful.
Headnote:(A) Constitution of India - Article 12 - Development agreement with State department - Disputes under arbitration - Scope of judicial interference - Writ court cannot question the legality of an arbitration award deemed a decree unless arbitrary or vitiated by extraneous considerations. (Paras 5, 23)
(B) Lease agreement - Compliance with terms - Requirement of prior permission for non-compliant use of land confirmed - Termination valid due to breach of lease terms - Sufficient cause established for reentry by State upon default by lessee. (Paras 10, 20)
Facts of the case:
Dispute arose from a lease between the State of West Bengal and the West Bengal Social Welfare Board. The Board's failure to obtain necessary permissions led to the State terminating the lease and retaking possession of the land.
Findings of Court:
The court held the State's actions were justified, upholding its right to terminate the lease due to non-compliance with the terms and the legality of the arbitration award.
Issues: Whether the Writ Court can question the validity of an arbitration award, and the implications of breaching lease conditions.
Ratio Decidendi: The court affirmed that an arbitration award is binding and a decree unless contested, and justified the State’s actions in accordance with breach-of-contract provisions set forth in the lease.
Result: Appeal dismissed.
| Table of Content |
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| 1. details of lease terms and conditions. (Para 14) |
| 2. the court's reasoning on the plausibility of the state’s actions. (Para 20 , 23) |
| 3. court's legal conclusions regarding the validity of state’s actions. (Para 22 , 24) |
| 4. final ruling and decision of dismissal. (Para 27) |
For the Appellant : Mr. Mainak Bose, Sr. Adv., Mr. Anuj Singh Mr. V.V.V. Sastry Mr. Anirudh Goyel For the State : Mr. T.M. Siddiqui, Ld. A.G.P., Mr. Suddhadev Adak Heard & Judgment on : June 13, 2025 DEBANGSU BASAK, J.:-
1. Appeal is at the behest of the writ petitioners and directed against a judgment and order dated September 19, 2023 passed in W.P.A. 2028 of 2018.
2. By the impugned judgment and order, learned Single Judge dismissed the writ petition.
3. Learned senior advocate appearing for the appellant submits that, the appellant entered into a development agreement dated September 9, 2013 which was modified on September 20, 2014, with the West Bengal Social Welfare Board. He submits, that West Bengal Social Welfare Board is a department of the State of West Bengal. Both the State of West Bengal as also the West Bengal Social Welfare Board are the authorities within the meaning of Article 12 of the Constitution of India . According to him, State of West Bengal and West Bengal Social Welfare Board are alter ego of each other.
4. Learned senior advocate appearing for the appellant draws the attention of the Court to the impugned judgment and order where the learned Single Judge returned the finding that that State of West Bengal and the West Bengal Social Welfare Board are one and the same.
5. Learned senior advocate appearing for the appellant submits that, the development agreement entered into between the appellant and the West Bengal Social Welfare Board contains an arbitration clause. Pursuant to such arbitration agreement, a reference was made to arbitration and the disputes between the appellant and West Bengal Social Welfare Board culminated into an award dated August 31, 2017 of the Arbitral Tribunal. He submits that the award is now a decree of the Court. He submits that, to the knowledge of the appellant, West Bengal Social Welfare Board did not challenge such award.
6. Learned senior advocate appearing for the appellant draws the attention of the Court to a portion of the impugned judgment and order where according to him, learned Single Judge pronounced on the legality and validity of the award dated August 31, 2017. He submits that, such observations can affect the executability of the award. In any event, according to him, the Writ Court cannot question the award dated August 31, 2017 which is deemed to be a decree of the Court.
7. Learned senior advocate appearing for the appellant submits that, the appellant executed the development subsequently modified and construction of a building as agreed upon. He submits that, the appellant found a signboard on the plot concerned erected by the State of West Bengal from which the appellant became aware of the alleged termination of the lease between the State of West Bengal and West Bengal Social Welfare Board. He submits that the alleged termination of the lease by the State of West Bengal is not in accordance with the Transfer of Property Act .
8. Learned senior advocate appearing for the appellant submits that since for all practical purposes, the State of West Bengal and the West Bengal Social Welfare Board are to be treated as one of the same unit, State of West Bengal is bound by the award dated August 31, 2017. He submits that, since no challenge was thrown to the award dated August 31, 2017, the State of West Bengal cannot be permitted to take steps so as to resile from the award which now partakes the character of a decree of a Court. He submits that the actions taken by the State are such that it seeks to render nugatory the award dated August 31, 2017 which are not permissible.
9. Learned senior advocate appearing for the State submits that a lease was granted by the State of W
