# AND INVESTMENT CORPORATION & ANR v. DIAMOND AND GEM DEVELOPMENT CORPORATION LTD. & ANR

- **Citation:** [2013] 4 S.C.R. 331
- **Court:** Supreme Court of India
- **Decided:** 2013-02-12
- **Case number:** Civil Appeal Nos. 7252-7253 of 2003
- **Bench:** Dr. B.S. Chauhan, V. Gopala Gowda
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/and-investment-corporation-anr-v-diamond-and-gem-development-corporation-ltd-anr-29023
- **Pages:** 33

## Headnote

Rajasthan State Industrial & Investment Corporation
C
Limited (Disposal of Land) Rules, 1979 - r.24 - Land notified
for public purpose - Possession of land taken over by the
State Government and handed over to appellant-Rf/CO -
Appellant allotted the land to respondent-company, to
facilitate establishment of an Industrial Estate - Lease deed
D
executed between appellant and respondent-company -
- Respondent-company asked the appellant to provide it
accessibility via an approach road and, as the same was not
provided, it filed writ petition seeking such approach/access
road - Meanwhile, on ground of non-completion of project
E
within stipulated period, the appellant cancelled the lease
deed and took back possession of the land -
Same
challenged by respondent-company by filing another writ
petition - High Court allowed both the writ petitions - On
appeal, held: The allotment was made on "as-is- where-is"
F
basis which was accepted by respondent-company without
any protest - Terms of the lease deed made it clear that no
obligation was placed upon the appellant to provide to the
respondent the access road - As per the lease deed, the
entire project was to be completed within five years, but G
construction was made just on a fraction of the entire land -
The lease deed also contemplated that, the lessee will not
transfer nor sub-let nor relinquish rights without prior
permission from the appellant - However, respondent331
H
332
SUPREME COURT REPORTS
(2013] 4 S.C.R.
A company had negotiated with a third party for development
of the land - Cancellation of allotment was made by appellant
in exercise of its power under Rule 24 of the 1979 Rules read
with the terms of the lease agreement - Respondentcompany did not resort to any of the statutory remedies, rather
B preferred a writ petition which could not have been entertained
by the High Court - High Court erred in treating the whole
case to be governed only under the 1959 Rules, and in
holding that the 1979 Rules had no application at all - It
further mis-interpreted the amendment to Rule 11-A of the
c 1959 Rules and decided the case on speculative and
hypothetical reasons - Order of cancellation of allotment in
favour of respondent-company accordingly restored -
Rajasthan Land Revenue (Industrial area allotment) Rules,
1959 - r.11-A - Rajasthan Land Acquisition Act, 1953 - ss.
0 4and6.
Contract - Terms and conditions - Interpretation - Held:
The contract is to be interpreted giving the actual meaning
to the words contained in the contract -It is not permissible
for the court to make a new contract, however reasonable, if
E the parties have not made it themselves.
Constitution of India, 1950 - Article 226 - Contractual
disputes and writ jurisdiction - Held: Generally the court
should not exercise its writ jurisdiction to enforce contractual
F obligation.
G
H
Doctrines I Principles - Doctrine of estoppel by election
- Basis of - Equity.
Words and Phrases - "as-is-where-is" - Meaning of.
Words and Phrases - "as if' - Meaning of - Rajasthan
Land Revenue (Industrial area allotment) Rules, 1959- r.11A
(as amended).
Words and Phrases - "mutatis mutandis" - Meaning of
RAJASTHAN STATE IND. DEV. AND INT CORPN. v. DIAMOND 333
AND GEM DEV. CORPN. LTD.
- Rajasthan Land Revenue (Industrial area allotment) Rules,
A
1959 - r.11A (as amended).
Land was notified for a public purpose i.e. industrial
development under Section 4(1) of the Rajasthan Land
Acquisition Act, 1953. Declaration under Section 6 of the 8
Act was also made and possession of the land, was
taken over by the State Government and handed over to
appellant-RllCO. Appellant made allotment of land to
respondent no.1-company, to facilitate the establishment
of a Gem Industrial Estate. A lease deed was executed
between the appellant and respondent-company with a C
stipulation that the land was allotted on "as is-where-is"
basis, and that the respondent-company must complete
the said project within a period of 5 years. The
respondent-compan

## Text

_Characters 0–39,809 of 60,853. This is a partial read: ask again with offset=39809 for what follows._

[2013] 4 S.C.R. 331
THE RAJASTHAN STATE INDUSTRIAL DEVELOPMENT
A
AND INVESTMENT CORPORATION & ANR.
v.
DIAMOND AND GEM DEVELOPMENT CORPORATION
LTD. & ANR.
(Civil Appeal Nos. 7252-7253 of 2003)
B
FEBRUARY 12, 2013
[DR. B.S. CHAUHAN AND V. GOPALA GOWDA, JJ.]
Rajasthan State Industrial & Investment Corporation
C
Limited (Disposal of Land) Rules, 1979 - r.24 - Land notified
for public purpose - Possession of land taken over by the
State Government and handed over to appellant-Rf/CO -
Appellant allotted the land to respondent-company, to
facilitate establishment of an Industrial Estate - Lease deed
D
executed between appellant and respondent-company -
- Respondent-company asked the appellant to provide it
accessibility via an approach road and, as the same was not
provided, it filed writ petition seeking such approach/access
road - Meanwhile, on ground of non-completion of project
E
within stipulated period, the appellant cancelled the lease
deed and took back possession of the land -
Same
challenged by respondent-company by filing another writ
petition - High Court allowed both the writ petitions - On
appeal, held: The allotment was made on "as-is- where-is"
F
basis which was accepted by respondent-company without
any protest - Terms of the lease deed made it clear that no
obligation was placed upon the appellant to provide to the
respondent the access road - As per the lease deed, the
entire project was to be completed within five years, but G
construction was made just on a fraction of the entire land -
The lease deed also contemplated that, the lessee will not
transfer nor sub-let nor relinquish rights without prior
permission from the appellant - However, respondent331
H
332
SUPREME COURT REPORTS
(2013] 4 S.C.R.
A company had negotiated with a third party for development
of the land - Cancellation of allotment was made by appellant
in exercise of its power under Rule 24 of the 1979 Rules read
with the terms of the lease agreement - Respondentcompany did not resort to any of the statutory remedies, rather
B preferred a writ petition which could not have been entertained
by the High Court - High Court erred in treating the whole
case to be governed only under the 1959 Rules, and in
holding that the 1979 Rules had no application at all - It
further mis-interpreted the amendment to Rule 11-A of the
c 1959 Rules and decided the case on speculative and
hypothetical reasons - Order of cancellation of allotment in
favour of respondent-company accordingly restored -
Rajasthan Land Revenue (Industrial area allotment) Rules,
1959 - r.11-A - Rajasthan Land Acquisition Act, 1953 - ss.
0 4and6.
Contract - Terms and conditions - Interpretation - Held:
The contract is to be interpreted giving the actual meaning
to the words contained in the contract -It is not permissible
for the court to make a new contract, however reasonable, if
E the parties have not made it themselves.
Constitution of India, 1950 - Article 226 - Contractual
disputes and writ jurisdiction - Held: Generally the court
should not exercise its writ jurisdiction to enforce contractual
F obligation.
G
H
Doctrines I Principles - Doctrine of estoppel by election
- Basis of - Equity.
Words and Phrases - "as-is-where-is" - Meaning of.
Words and Phrases - "as if' - Meaning of - Rajasthan
Land Revenue (Industrial area allotment) Rules, 1959- r.11A
(as amended).
Words and Phrases - "mutatis mutandis" - Meaning of
RAJASTHAN STATE IND. DEV. AND INT CORPN. v. DIAMOND 333
AND GEM DEV. CORPN. LTD.
- Rajasthan Land Revenue (Industrial area allotment) Rules,
A
1959 - r.11A (as amended).
Land was notified for a public purpose i.e. industrial
development under Section 4(1) of the Rajasthan Land
Acquisition Act, 1953. Declaration under Section 6 of the 8
Act was also made and possession of the land, was
taken over by the State Government and handed over to
appellant-RllCO. Appellant made allotment of land to
respondent no.1-company, to facilitate the establishment
of a Gem Industrial Estate. A lease deed was executed
between the appellant and respondent-company with a C
stipulation that the land was allotted on "as is-where-is"
basis, and that the respondent-company must complete
the said project within a period of 5 years. The
respondent-company asked the appellant to provide it
accessibility via an approach road and, as the same was D
not provided, the respondent-company filed Writ Petition
before the High Court, seeking the issuance of a direction
to the appellant to provide to it, such a road.
Meanwhile, the appellant issued a show cause notice, E
to determine the lease in light of the lease agreement, as
even after expiry of 5 years, only 10% of the total
construction work stood completed. In pursuance
thereof, the lease deed was cancelled, and possession
of the land in dispute was taken back by the appellant.
F
The respondent-company filed another Writ Petition
challenging the cancellation order and the taking over of
possession by the appellant.
The High Court allowed both the writ petitions,
quashing the order of cancellation, and directing G
restoration of possession of the land to respondentcompany, and further, ~lso directing the appellant to
provide to respondent-company, the approach/access
road demanded by it.
H
334
SUPREME COURT REPORTS
[2013] 4 S.C.R.
A
In the instant appeals, the appellant-RllCO, and the
State of Rajas than raised the following contentions: - 1)
that as allotment of the land had been made to the
respondent-company on 'as-is-where-is" basis, there was
no obligation on the part of RllCO to provide to it, the said
B access road; 2) that cancellation of the lease deed was
in accordance with the terms and conditions incorporated
in the lease deed; and 3) that the High Court misinterpreted the amendment to Rule 11-A of the Rajasthan
Land Revenue (Industrial area allotment) Rules 1959, and
c thus erred in holding that the appellant had no jurisdiction
to cancel the said lease.
Allowing the appeals, the Court
HELD: 1. The instant case is required to be decided
D in the light of the following settled legal propositions:
1.1. Approbate and Reprobate: A party cannot be
permitted t.o "blow hot-blow cold", "fast and loose" or
"approbate and reprobate". Where one knowingly
E accepts the benefits of a contract, or conveyance, or of
an order, he is estopped from denying the validity of, or
the binding effect of such contract, or conveyance, or
order upon himself. This rule is applied to ensure equity,
however, it must not be applied in such a manner, so as
to violate the principles of, what is right and, of good
F
conscience. The doctrine of election is based on the rule
of estoppel- the principle that one cannot approbate and
reprobate is inherent in it. The doctrine of estoppel by
election is one among the species of estoppels in pais (or
equitable estoppel), which is a rule of equity. By this law,
G a person may be precluded, by way of his actions, or
conduct, or silence when it is his duty to speak, from
asserting a right which he would have otherwise had.
[Para 9, 1 O] [351-E-F, H; 352-A-B]
H
Nagubai Ammal & Ors. v. B. Shama Rao & Ors. AIR 1956
RAJASTHAN STATE IND. DEV AND INT CORPN. v.
335
DIAMOND AND GEM DEV CORPN. LTD.
SC 593: 1956 SCR 451; CJ T. Madras v. Mr. P Firm Muar A
AIR 1965 SC 1216: 1964 SCR 45; Ramesh Chandra Sank/a
etc. v. Vikram Cement etc. AIR 2009 SC 713: 2008 (10) SCR
243; Pradeep Oil Corporation v. Municipal Corporation of
Delhi & Anr. AIR 2011 SC 1869: 2011 (4) SCR 764; Cauvery
Coffee
Traders,
Mangalore
v.
Hornor Resources B
(International) Company Limited (2011) 10 SCC 420: 2011
(12) SCR 473 and V. Chandrasekaran & Anr. v. The
Administrative Officer & Ors. JT 2012 (9) SC 260 - relied on.
1.2. Mutatis Mutandis - meaning: The phrase "mutatis
mutandis" implies that a provision contained in other part of C
the statute or other statutes would have application as it is
with certain changes in points of detail. [Para 11] [353-C]
Mis. Ashok SeNice Centre & Anr. etc. v. State of Orissa
AIR 1983 SC 394: 1983 (2) SCR 363; Prah/ad Sharma v. D
State of U.P. & Ors. (2004) 4 SCC 113: 2004 (2) SCR 594;
Mariyappa & Ors. v. State of Karnataka & Ors. AIR 1998 SC
1334: 1998 (1) SCR 988 and Janba (dead) thr. Lrs. v.
Gopikabai (Smt.) AIR 2000 SC 1771: 2000 (2) SCR 1035 -
relied on.
E
1.3. Contractual disputes and writ jurisdiction: Matters/
disputes relating to contract cannot be agitated nor terms
of the contract can be enforced through writ jurisdiction
under Article 226 of the Constitution. The writ court
cannot be a forum to seek any relief based on terms and F
conditions incorporated in the agreement by the parties.
Generally the court should not exercise its writ jurisdiction
to enforce the contractual obligation. [Paras 12, 14] [353D-E; 354-B]
Bareil/y Development Authority & Anr. v. Ajay Pal Singh
& Ors. AIR 1989 SC 1076: 1989 (1) SCR 743; State of U.P.
& Ors. v. Bridge & Roof Co. (India) Ltd. AIR 1996 SC 3515:
1996 (4) Suppl. SCR 762 and Kera/a State Electricity Board
G
& Anr. v. Kurien E. Kalathil & Ors. AIR 2000 SC 2573: 2000 H
336
SUPREME COURT REPORTS
[2013] 4 S.C.R.
A
(1) Suppl. SCR 581 - relied on.
1.4. Interpretation of terms of contract: A party cannot
claim anything more than what is covered by the terms
of contract, for the reason that contract is a transaction
8
between the two parties and has been entered into with
open eyes and understanding the nature of contract.
Thus, contract being a creature of an agreement between
two or more parties, has to be interpreted giving literal
meanings unless, there is some ambiguity therein. The
C contract is to be interpreted giving the actual meaning to
the words contained in the contract and it is not
permissible for the court to make a new contract, however
is reasonable, if the parties have not made it themselves.
It is to be interpreted in such a way that its terms may not
be varied. The contract has to be interpreted without
D giving any outside aid. The terms of the contract have to
be construed strictly without altering the nature of the
contract, as it may affect the interest of either of the
parties adversely. [Para 16] [355-C-F]
E
United India Insurance Co. Ltd. v. Harchand Rai
Chandan Lal AIR 2004 SC 4794: 2004 (4) Suppl. SCR 662;
Polymat India P. Ltd. & Anr. v. National Insurance Co. Ltd. &
Ors. AIR 2005 SC 286: 2004 (6) Suppl. SCR 535 and DLF
Universal Ltd. & Anr. v. Director, T. and C. Planning
F
Department Haryana & Ors. AIR 2011 SC 1463: 2010 (15)
SCR 85 - relied on.
1.5. "As-is-where-is" - means
The phrase, "as is-where-is", has been explained by
G Supreme Court in the case of Punjab Urban Planning &
Development Authority, wherein it was held, that the
allottees after having accepted the allotment on "as-iswhere-is" basis, are estopped from contending that the
basic amenities like parking, lights, roads, water,
H sewerage, etc. were not provided by PUDA when the
RAJASTHAN STATE IND. DEV. AND INT CORPN. v. DIAMOND 337
AND GEM DEV. CORPN. LTD.
plots were allotted. [Para 18] [356-F-G; 357-8-C]
A
Punjab Urban Planning & Development Authority & Ors.
v. Raghu Nath Gupta & Ors. (2012) 8 SCC 197 and UT
Chandigarh Admn. & Anr. v. Amarjeet Singh & Ors. (2009) 4
SCC 660: 2009 (4) SCR 541 - relied on.
B
1.6. "As if' - means
The expression "as if", is used to make one
applicable in respect of the other. The words "as if' create
a legal fiction. The words "as if", in fact show the C
distinction between two things and, such words must be
used only for a limited purpose. They further show that a
legal fiction must be limited to the purpose for which it was
created. [Para 19] [357 ·D-E, F-G]
Radhakissen Chamria & Ors. v. Durga Prasad Chamria
D
& Anr. AIR 1940 PC 167; Commr. of Income-tax, Delhi v. S.
Teja Singh AIR 1959 SC 352: 1959 Suppl. SCR 394; Ram
Kishore Sen & Ors. v. Union of India & Ors. AIR 1966 SC 644:
1966 SCR 430; Sher Singh v. Union of India & Ors. AIR 1984
SC 200: 1984 (1) SCR 464; State of Maharashtra v. Laljit
E
Rajshi Shah & Ors. AIR 2000 SC 937: 2000 (1) SCR 1239;
Paramjeet Singh Patheja v. /COS Ltd. AIR 2007 SC 168:
2006 (8) Suppl. SCR 178; Commissioner of Income Tax v.
Willamson Financial Services & Ors. (2008) 2 SCC 202: 2007
(13) SCR 376; East End Dwelling Co. Ltd. v. Finsbury
F
Borough Council 1952 AC 109 and Industrial Supplies Pvt.
Ltd. & Anr. v. Union of India & Ors. AIR 1980 SC 1858: 1981
(1) SCR 375 - relied on.
2.1. In the instant case, the terms and conditions
G
incorporated in the lease deed reveal that, the allotment
was made on "as-is- where-is" basis. The same was
accepted by the respondent-company without any
protest, whatsoever. The lease deed further enabled the
appellant to collect charges, in case it decided to provide
H
338
SUPREME COURT REPORTS
[2013) 4 S.C.R.
A the approach road. Otherwise, it would be the
responsibility of the respondent-company to use its own
means to develop such road, and there was absolutely
no obligation placed upon the appellant to provide to the
respondent the access road. As the respondents company was responsible for the creation of its own
infrastructure, it has no legal right to maintain the writ
petition. The order of the High Court is in contravention
of clause 2(g) of the lease deed. [Para 22] [358-G-H; 359A-B]
c
2.2. The High Court erred in holding that the provision
of providing the access road was an obligation on the
part of the appellant-RllCO, deciding this on equitable
grounds. The terms of the lease deed clearly stipulated
that in case the appellant-RllCO provides the access
D road, it will be vested with the right to collect the charges
incurred by 1t from the respondent-company, therein, and
in the alternative, it would be the obligation of the
respondent-company to develop its own infrastructure,
and the same would include development of the access
E road. Therefore, the appellant-RllCO was not under any
obligation to provide the said access road. [Para 26] [360E-F]
3.1. The State exercised its power in transferring the
F land to RllCO under the Rajasthan Land Revenue
(Industrial area allotment) Rules, 1959. However, further
allotment by RllCO to the respondent-company was
under the Rajasthan State Industrial & Investment
Corporation Limited (Disposal of Land) Rules, 1979.
G Therefore, the High Court committed an error treating that
the whole case was governed only under the Rules, 1959,
and that Rules, 1979 had no application at all. [Para 23]
[359-C-D]
3.2. The interpretation given to the amended Rule 11·
H A of the Rules 1959 by the High Court, takes away the
RAJASTHAN STATE IND. DEV AND INT. CORPN. v. DIAMOND 339
AND GEM DEV CORPN. LTD.
vested right of the appellant-RllCO in the title as well as
A
in the interest that it had acquired in the property, as it
had paid the entire amount for the land to the State when
possession of land was handed over to it. Rule 11-A of
the Rules 1959 was amended only to facilitate the
respondent-company to grant further sub-lease and not B
to divest RllCO from its rights and title.The rule provided
a deeming clause/fiction that for the purpose of sub-lease
by the respondent-company to further allottees, it would
·be deemed that the State Government had executed the
lease in favour of the respondent-company. The terms c
"mutatis mutandis", and "as if", used in the amended
provisions of Rule 11-A of the Rules 1959 simply
facilitated the sub-letting of a part of the premises by the
respondent-company, and did not take away the title and
rights that the appellant-RllCO had over the land. Rule 110
A of the Rules 1959 has further been amended on
12.10.2000 enabling all the allottees of RllCO to sub-lease
further. Thus, if the interpretation given by the High Court
is accepted, the appellant RllCO looses all its lands and
properties and rendered the development authority
existing on papers only, without any status/authority. E
[Para 27) [360-G-H; 361-A-D]
3.3.
The
appellant-RllCO
had autonomous
functioning, and the interpretation given by the High
Court has devastating effect underlying its status,
F
authority and autonomous functioning. In fact, by
interpretation the High Court had conferred an
authoritarian role to the State, taking away the right of
appellant-RllCO on its property without realizing that the
amendment to Rule 11-A of the Rules 1959 had G
specifically been engrafted therein only, for the purpose
of facilitating the respondent-company to grant further
sub-lease. Thus, it is evident that the High Court decided
the case on speculative and hypothetical reasons. [Para
28) [361-F-H]
H
340
SUPREME COURT REPORTS
. [2013) 4 S.C.R.
A
3.4. According to clause 2(d) of the lease deed the
entire project was to be completed within a period of five
years. But it is evident from the material on record that
construction was just made on the fraction of the entire
land. Clause 2 (i) contemplated that, the lessee will not
B transfer nor sub-let nor relinquish rights without prior
permission from the appellant-RllCO. However, it is
evident from the record that the respondent-company
had negotiated with a third party for development of the
land. [Para 30) [362-D-F]
c
3.5. The cancellation of allotment was made by
appellant- RllCO in exercise of its power under Rule 24
of the Rules 1979 read with the terms of the lease
agreement. Such an order of cancellation could have
0
been challenged by filing a review application before the
competent authority under Rule 24 (aa) and, in the
alternative, the respondent-company could have
preferred an appeal under Rule 24(bb)(ii) before
Infrastructure Development Committee of the Board. The
respondent-company ought to have resorted to the
E arbitration clause provided in the lease deed in the event
of a dispute, and the District Collector would have then,
decided the case. However, the respondent-company did
not resort to either of the statutory remedy, rather
preferred a writ petition which could not have been
F
entertained by the High Court. It is a settled law that writ
does not lie merely because it is lawful to do so. A person
may be asked to exhaust the statutorylalternative remedy
available to him in law. [Para 31) [362-F-H; 363-A-B]
G
H
3.6. The order of cancellation of allotment in favour
of the respondent-company by the appellant is restored.
[Para 32) [363-C]
Case Law Reference:
1956 SCR 451
relied on
Para 9
RAJASTHAN STATE IND. DEV. AND INT. CORPN. v. DIAMOND 341
AND GEM DEV CORPN. LTD.
1!l64 SCR 45
relied on
Para 9
A
2008 (10) SCR 243
relied on
Para 9
'2011 (4) SCR 764
relied on
Para 9
2011 (12) SCR 473
relied on
Para 9
B
Jr' 2012 (9) SC 260
relied on
Para 9
1983 (2) SCR 363
relied on
Para 11
2004 (2) SCR 594
relied on
Para 11
c
1998 (1) SCR 988
relied on
Para 11
2000 (2) SCR 1035
relied on
Para 11
1989 (1) SCR 743
relied on
Para 12
1996 (4) Suppl. SCR 762
relied on
Para 12
D
2000 (1) Suppl. SCR 581
relied on
Para 13
2004 (4) Suppl. SCR 662
relied on
Para 16
2004 (6) Suppl. SCR 535- relied on
Para 16
E
2010 (15) SCR 85
relied on
Para 17
(2012) 8 sec 191
relied on
Para 18
2009 (4) SCR 541
relied on
Para 18
F
AIR 1940 PC 167
relied on
Para 19
1959 Suppl. SCR 394
relied on
Para 19
1966 SCR 430
relied on
Para 19
1984 (1) SCR 464
relied on
Para 19
G
2000 (1) SCR 1239
relied on
Para 19
2006 (8) Suppl. SCR 178
relied on
Para 19
2007 (13) SCR 376
relied on
Para 19
H
A
B
c
D
342
SUPREME COURT REPORTS
1952 AC 109
1981 (1) SCR 375
relied on
relied on
[2013] 4 S.C.R.
Para 20
Para 21
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
7252-7253 of 2003.
From the Judgment & Order dated 30.07.2002 of the High
Court of Judicature at Jaipur Bench Jaipur in D.8. Civil Writ
Petition No. 5481 of 1994 and D.B. Civil Writ Petition No. 105
of 1997.
WITH
C.A. No. 8222-8223 of 2013.
Dhruv Mehta, Dr. Manish Singhvi, AAG, Milind Kumar,
Amit Lubhaya, Pragati Neekhra for the Appellants.
P.S. Patwalia, Rakesh Dwivedi, M.N. Krishnamani, Ajay
Singh, Ashok K. Mahajan, Shibashish Misra, Sanskriti Pathak,
P.V. Yogeswaran, R. Gopalakrishnan, Sanjay Parikh, Mamta
Saxena, Bushra Parveen, A.N. Singh, Aruneshwar Gupta for the
E
Respondents.
The Judgment of the Court was delivered by
DR. B. S. CHAUHAN, J. 1. These appeals have been
preferred against the impugned judgment and order dated
F
30.7.2002 passed by the High Court of Rajasthan (Jaipur
Bench) in Civil Writ Petition Nos. 5481/1994 and 105/1997, by
which the High Court has allowed the writ petitions filed by the
respondent-Diamond and Gem Development Corporation Ltd.
(hereinafter referred to as the 'Company'), for quashing the
G order of cancellation of allotment of land and directing the
appellants for providing the approach/access road.
H
2. As these appeals have been preferred against the
common impugned judgment, for the sake of convenience, Civil
Appeal Nos. 7252-53/2003 are to be taken to be the leading
RAJASTHAN STATE IND. DEV AND INT. CORPN. v. DIAMOND 343
AND GEM DEV CORPN. LTD. [DR. B.S. CHAUHAN. J.]
case. The facts and circumstances giving rise to these appeals A
are:
A That a huge area of land admeasuring 607 Bighas and
5 Biswas situate in the revenue estate of villages Durgapura,
Jhalan Chod, Sanganer and Dhol-ka-Bad in District Jaipur,
B
stood notified under Section 4(1) of the Rajasthan Land
Acquisition Act, 1953 (hereinafter referred to as the 'Act') on
18.7.1979, for a public purpose i.e. industrial development, to
be executed by the appellant Rajasthan State Industrial
Development and Investment Corporation (in short 'RllCO').
B. Declaration under Section 6 of the Act was made on
22.6. 1982 for the land admeasuring 591 Eiighas and 17
Biswas. After meeting all requisite statutory requirements
contained in the Act, possession of the land, was taken over
c
_ by the Government and was subsequently handed over to
D
appellant-RllCO, on 18.10.1982 and 17.11.1983. The Land
Acquisition Collector assessed the market value of the land and
made an award on 14.5.1984. RI ICO made allotment of land
admeasuring 105 acres vide allotment letter dated 10.3. 1988
to the respondent no.1 company, to facilitate the establishment
E
of a Gem Industrial Estate for the manufacturing of Gem stones.
C. In pursuance of the aforesaid allotment letter, a lease
deed was executed between the appellant and respondentcompany on 22.5.1989, with a clear stipulation that the land was
F
allotted on an "as is-where-is'', and that the respondentcompany must complete the said project within a period of 5
years, and further that, in the event that the terms and conditions
of the lease agreement were not complied with, the appellant
would be entitled to recover its possession in addition to which,
various other conditions were also incorporated therein.
G
D. After possession was taken by the respondentcompany, construction could be carried only on a portion of the
land allotted to it. As the development work was being carried
out at an extremely slow pace, the appellant issued various
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notices from time to time, reminding the respondent-company
that it was under an obligation to complete the project within a
specified period, owing to which, it must accelerate work.
Additionally, there also arose some difficulty with respect to the
respondent-company's attempts to sub-lease the said
B
premises, or parts thereof, and in view of this, an amendment
dated 4.11.1991 was inserted in Rule 11-A of the Rajasthan
Land Revenue (Industrial area Allotment) Rules, 1959
(hereinafter referred to as the 'Rules 1959'), enabling the
company to sub-lease the said land.
c
E. The appellant vide notice dated 4.7.1992, informed the
respondent-company, that as per clause 2(n) of the lease deed,
all construction had to be completed within a stipulated time
period of 5 years. The respondent-company began asking the
appellant to provide it accessibility via road, from the Jaipur
D Tonk main road and, as the same was not provided, the
respondent-company filed Writ Petition No. 5481 of 1994
before the High Court, seeking the issuance of a direction to
the appellant to provide to it, the aforesaid road.
E
F. During the pendency of the aforesaid writ petition, the
appellant expressing its dis-satisfaction with regard to the
progress of the development of the said land by the
respondent-company, filed a reply to the said writ petition before
the High Court stating that it was not under any obligation to
F
provide to the respondent-company the aforementioned
approach road, as the lease deed had been executed between
them, on the basis of an "as-is-where is" agreement. Further,
the appellant issued a show cause notice dated 29.8.1996, to
determine the lease in light of the lease agreement, in lieu of
the fact that the respondent-company had not made any
G progress regarding the completion of the project, and even after
the expiry of a period of 5 years, only 10% of the total
construction stood completed. In pursuance thereof, the lease
deed was cancelled vide order dated 1.10.1996, and
possession of the land in dispute was taken back by the
H appellant on 3.10.1996.
RAJASTHAN STATE IND. DEV. AND INT CORPN. v. DIAMOND 345
AND GEM DEV. CORPN. l TD. [DR B.S. CHAUHAN, J]
G. The respondent-company filed another Writ Petition No.
A
105 of 1997, challenging the cancellation order dated
1.10.1996 and the taking over of possession by the appellant
on 3.10.1996. The appellant contested the said writ petition on
the grounds that it was entitled to restoration of possession, as
the respondent-company had failed to ensure compliance with
B
the terms and conditions incorporated in the lease deed,
according to which, the company was required to complete the
said project within a period of 5 years. However, presently, the
extent of development completed by it stood at 10%. Therefore,
in light of the aforementioned circumstances, the appellant had c
no choice but to cancel the lease deed and take back
possession.
H. The High Court vide its impugned judgment and order,
allowed both the writ petitions quashing the order of
cancellation, and directed the restoration of possession of the
D
aforesaid land to the respondent-company, and further, also
directed the appellant to provide to the respondent-company,
the approach/access road demanded by it.
Hence, these appeals.
3. Shri Dhruv Mehta, learned senior counsel appearing on
behalf of the appellant-RllCO, and Shri Manish Singhvi, learned
Additional Advocate General for the State of Rajasthan have
submitted that, as the allotment of the land had been made to
the respondent-company on an 'as-is-where-is" basis, there
was no obligation on the part of RllCO to provide to it, the said
access road. The terms of the contract must be interpreted by
court, taking into consideration the intention of the parties and
E
F
not on the basis of equitable grounds. Moreover, the
cancellation of the deed was in accordance with the terms and
G
conditions incorporated in the lease deed, and therefore, in light
of the facts and circumstance of the case, the High Court has
committed an error, by quashing the order of cancellation and,
in issuing a direction for the restoration of possession and for
the provision of the access road.
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The High Court has mis-interpreted the amendment to Rule
11-A of the Rules 1959, and has thus held that the appellant
had no jurisdiction to cancel the said lease. as the respondentcompany by virtue of the operation of the amended provision.
had become a direct lessee of the State. In such a fact-situation,
B there was no obligation on the part of the appellant to provide
the approach road as it was not the lessor of the respondentcompany. In case by virtue of the amendment in Rule 11-A of
the Rules 1959, the State Government became the lessor, the
appellant-RllCO lost the title/interest over the property which had
C been acquired by it on making payment of the huge money and
that too, without getting any refund. Such an interpretation leads
to absurdity. Thus, the appeals deserve to be allowed.
4. Per contra, Shri P.S. Patwalia, learned senior counsel
appearing for the respondent-company, has submitted that the
D judgment and order of the High Court does not require any
interference whatsoever, for the reason that the respondentcompany had been invited to establish and develop the Gem
Stone industrial park at Jaipur. In view of the fact, that the
amendment to Rule 11-A of the Rules 1959 was made
E exclusively to facilitate the respondent-company to sub-lease
a part of the developed premises, the High Court has rightly
held that the State Government became the lessor and that,
RllCO had no concern whatsoever in relation to the said matter,
•
owing to which, it had no competence to cancel the lease. In
F the light of the fact that RllCO was in possession of other lands
surrounding the land in question, the High Court has directed
it to provide to the respondent-company, an access road on
equitable grounds, taking into consideration the fact that, in the
event that the respondent-company's area remained land
G locked, it would be impossible for it to develop the project, and
has stated that not providing the access road was in fact, the
basic reason for delay in development. Thus, the appeals lack
merit and, are liable to be dismissed.
5. We have considered the rival submissions made by
H learned counsel for the parties and perused the record.
RAJASTHAN STATE IND. DEV AND INT CORPN. v. DIAMOND 347
AND GEM DEV CORPN. LTD. [DR B.S. CHAUHAN, J.]
Before proceeding further, it may be pertinent to refer to
A
the relevant statutory provisions, and certain terms of the lease
deed.
Rule 11-A of the Rules 1959 read :
"
8
xx
xx
xx
Clause (iv) of Rule 11-A.- The Rajasthan State Industrial
Development and Investment Corporation Ltd. may subC
lease the leased land or part thereof for industrial purpose;
including essential welfare and supporting services.
Provided that in the case of Diamond and Gem
Development Corporation to whom the land has already
been leased out by RllCO for 99 years, the sub-lessee i.e.
D
DGDC may further sublet and the terms and conditions
and other provisions contained in the rules in so far as they
relate to RllCO shall mutatis mutandis apply to DGDC
also as if the land in question has been let out to them by
State Government under Rule 11-A."
(Emphasis added)
6. There has been further amendment to Rule 11-A of the
Rules 1959 w.e.f. 12.10.2000, and the relevant part thereof
reads as under:
"In Rule 11-A of the said rules, after condition (iv) and
before condition (v), the following new condition (iv-a)
shall be inserted; namely:-
E
F
(iv-a) The sub lessee of the Rajasthan State Industrial G
Development and Investment Corporation Limited may
further sub-lease the sub-leased land or part thereof on
such terms and conditions as may be mutually agreed
between such sub-lessee and subsequent sub-lessee.
The terms and conditions applicable to sub-lessee shall H
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[2013] 4 S.C.R.
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a/so mutatis mutandis apply to such subsequent sublessee".
7. Rajasthan State Industrial & Investment Corporation
Limited (Disposal of Land) Rules, 1979 (hereinafter referred
8
to as 'Rules 1979'), deals with the allotment of land by RllCO
to entrepreneurs. Relevant rules thereof read as under:
"16. The allottee shall not except with the written consent
of the Corporation, be allowed to sublet the constructed
premises for industrial purpose only which can be
C
considered on following conditions:
D
E
F
G
H
(i) The sub-letting of vacant and/or unutilized land in the
industrial areas of the Corporation shall not be allowed.
(ii) That consent of the Managing Director be given to the
allottee of the plot (owner) to sublet the whole or part of
the constructed premises after the allottee has cleared all
the outstanding dues of the Corporation and started the
production at the allotted plot on the following conditions:
(iii) xx
xx .
xx
(iv) Permission for transfer of surplus/unutilized land with
the units which have come into commercial production shall
be granted on payment of premium as may be decided
by the Corporation from time to time which is presently
equal to 50% rate of development charges at the time of
such transfer of difference amount between the prevailing
rates of development charges and the rates of
development charges on which the allotment was made
whichever is higher.
24. Cancellation- The Corporation shall have the right to
cancel the allotment after issuing 30 days show cause
notice to the allottee by the concerned Senior Regional
Manager/Regional Manager on any breach of any of these
rules. condition of allotment letter and terms of lease
RAJASTHAN STATE IND. DEV. AND INT. CORPN. v. DIAMOND 349
AND GEM DEV. CORPN. LTD. [DR. B.S. CHAUHAN, J.]
agreement."
8. It may also be pertinent to refer the relevant terms and
conditions of lease deed dated 22.5.1989, which read as
under:
A
"AND WHEREAS the lessor has agreed to demise and 8
the lessor has agreed to take on lease, the piece of land
known as plot no. SP-1 lndusrial Area, Sanganer, Phase-
/I on "as is where is basis":
xx
xx
xx
c
2(b) That the lessee will bear, pay and discharge all
seNice charges as may be decided by the lessor from
time to time which for the present would be@ Rs.10.10
(Ten paisa per sq.mtrs.) per year from the date, the lessor 0
provided as pucca links road in this area.
xx
xx
xx
(d) That the Jessee will erect on the demised premises
..... and will commence such construction within the period E
of 6 months and will completely finish the same fit for use
and start production within the period of 60 months from
the date of these presents or within such the case of these
presents, or within such the date of these presents or
within such extended period of time as may be allowed
F
by the lessor in writing at its discretion.
xx
xx
xx
(g) That the lessee will provide and maintain in good
repair a properly constructed approached road or path G
alongwith the event across drain to the satisfaction of the
lessor/local Municipal Authority leading from the public/
cooperation road to the building to be erected on the
demises premises.
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350
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B
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[2013] 4 S.C.R.
xx
xx
xx
(i) The lessee will not without the general prior consent
in writing of the lessor transfer, sublet, relinquish,
mortgage or assign his interest in the demised
premises ....... .
xx
xx
xx
(m) ......... That lessee shall construct and complete the
said building and put the demised premises with the
buildings constructed thereon to use hereinabove
mentioned within 54 calendar months from the date of
possession of the said land is handed over to him and
in any case within 60 calendar months from the date of
this agreement provided that the lessor may at his
discretion extend the time hereinbefore provided if in his
opinion the delay is caused for reasons beyond the
control of the lessee. Provided that utilized land of the
allotted plot of land shall revert to the Corporation on the
expiry of the prescribed/extended period for starting
production/ expansion of the unit.
xx
xx
xx
(r) The lessee will in each year within 2 months from the
expiry of the account in year supply to the lessor a copy
F
of his profit and loss account pertaining to the accounting
year and the business run by him in the demised
premises.
G
H
3(a) Notwithstanding anything hereinbefore contained if
there shall have been in opinion of the lessor any breach
by the lessor .... or if the lessee fails to commence and
complete the buildings in time and manner it shall be
lawful for the lessor .... to reenter without taking recourse
to the Court of law up on the demised premises or any
part there of his name of whole and there on this demise
RAJASTHAN STATE IND. DEV. AND INT CORPN. v. DIAMOND 351
AND GEM DEV. CORPN. l TD. [DR. B.S. CHAUHAN, J.]
shall absolutely cease and determine and the money
A
paid by the Lessee by virtue of these preset shall stand
forfeited to the lessor without prejudice to rights of the
lessor here under with interest thereon at @19% per
annum and the Lessee shall not be entitled to any
compensation whatsoever.
B
xx
xx
xx
3(h) Every dispute, difference or question touching or
arising out or in respect of this agreement to the subject
matter shall be referred to the sole arbitrator, the C
Collector of the District wherein the leased plot is situated
or a, person appointed by him. The decision of such
arbitrator shall be final and binding on the parties."
Before entering into merits of the case, it is required to deal D
with the legal issues involved herein:
I. Approbate and Reprobate
9. A party cannot be permitted to "blow hot-blow cold", "fast
and loose" or "approbate and reprobate". Where one knowingly
E
accepts the benefits of a contract, or conveyance, or of an order,
he is estopped from denying the validity of, or the binding effect
of such contract, or conveyance, or order upon himself. This
rule is applied to ensure equity, however, it must not be applied
in such a manner, so as to violate the principles of, whafis right
F
and, of good conscience. (Vide: Nagubai Ammal & Ors. v. B.
Shama Rao & Ors., AIR 1956 SC 593; C./. T. Madras v. Mr.
P. Firm Muar, AIR 1965 SC 1216; Ramesh Chandra Sank/a
etc. v. Vikram Cement etc., AIR 2009 SC 713; Pradeep Oil
Corporation v. Municipal Corporation of Delhi & Anr., AIR G
2011 SC 1869; Cauvery Coffee Traders, Mangalore v. Hornor
Resources (International) Company Limited, (2011) 10 SCC
420; and V. Chandrasekaran & Anr. v. The Administrative
Officer & Ors., JT 2012 (9) SC 260).
10. Thus, it is evident that the doctrine of election is based
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on the rule of estoppel-the principle that one cannot approbate
and reprobate is inherent in it. The doctrine of estoppel by
election is one among the species of estoppels in pais (or
equitable estoppel), which is a rule of equ.ity. By this law, a
person may be precluded, by way of his actions, or conduct,
B
or silence when it is his duty to speak, from asserting a right
which he would have otherwise had.
II. Mutatis Mutandis - means
11. In Mis. Ashok Service Centre & Anr. etc. v. State of
C
Orissa, AIR 1983 SC 394, this court held as under:
D
E
F
G
"Earl Jowitt's 'The Dictionary of English Law 1959)' defines
'mutatis mutandis' as 'with the necessary changes in
points of detail'. Black's Law Dictionary (Revised 4th
Edn. 1968) defines 'mutatis mutandis' as 'with the
necessary changes in points of detail, meaning that
matters or things are generally the same, but to be
altered when necessary, as to names, offices, and the
like ... 'Extension of an earlier Act mutatis mutandis to a
later Act, brings in the idea of adaptation, but so far only
as it is necessary for the purpose, making a change
without altering the essential nature of the things
changed, subject of course to express provisions made
in the later Act .... ln the circumstances the conclusion
reached by the High Court that the two Acts were
independent of each other was wrong. We are of the view
that, it is necessary to read and to construe the two Acts
together as if the two Acts are one, and while doing so to
give effect to the provisions of the Act which is a later one
in preference to the provisions of the Principal Act
wherever the Act has manifested an intention to modify
the Principal Act ... •
Similarly, in Prahlad Sharma v. State of U.P. & Ors.,
(2004) 4 sec 113, the phrase 'mutatis mutandis' has been
H explained as under:
RAJASTHAN STATE IND. DEV. AND INT CORPN. v. DIAMOND 353
AND GEM DEV. CORPN. LTD. [DR. B.S. CHAUHAN, J.]
"The expression "mutatis mutandis" itself implies A
applicability of any provision with necessary changes in
points of detail .... "
(See also: Mariyappa & Ors. v. State of Karnataka & Ors., AIR
1998 SC 1334; and Janba (dead) thr. Lrs. v.