# COLLECTOR, DISTI. GWALIOR AND ANOTHER v. CINE EXHIBITORS P. LTD. AND ANOTHEI~

- **Citation:** [2012] 2 S.C.R. 932
- **Court:** Supreme Court of India
- **Decided:** 2012-01-11
- **Case number:** Civil Appeal Nos.281-282 of 2012
- **Bench:** Dalveer Bhandari, Dipak Misra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/collector-disti-gwalior-and-another-v-cine-exhibitors-p-ltd-and-anothei-28067
- **Pages:** 27

## Headnote

Town Planning - Nazul land -
Leased .by Gwalior
Development Authority (GOA) in public auction - Subsequent
C termination of the lease by lessor-GOA and lessee-first
respondent asked to hand over possession of the land - Writ
petition by first respondent dismissed by Single Judge of High
Court -Division Bench of High Court, however, held that
cancellation of the lease was unsustainable - Plea raised by
D State that there was no transfer of the land by the State in
favour of GOA, hence, the grant of lease by GOA in favGur of
first respondent was ab initio void and, therefore, there was
no right in favour of the respondent to retain possession
rejected by Division Bench on ground that since the GOA had
E granted lease in auction conducted with the knowledge of the
State, the State was estopped from raising the plea that the ·
land had not been transferred to the GOA - Held: Ncizul land,
unless notified, does not automatically get vested in any
authority or trust - Unless affirmative steps are takem by the
F State Government by issuing a notification changing the
character of the land and transferring it in favour of any
authority, corporation or municipality, it maintains: its own
character, i.e., nazul land - In the case at hand, nothing on
record that the nazul land in question had ever been notified
for transfer in favour of the GOA - GOA never became the
G owner of the land or had the authority to deal with the land and,
therefore, it could not have put the land to auction for any
purpose whatsoever- First respondent cannot assert any right
or advance any claim to remain in possession ancf run the
H
932
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 933
P. LTD.
cinema hall thereon and that too after cancellation of the
A
licence for running the cinema hall, solely on the basis of a
lease granted by its lessor-GOA, a statutory authority, which
had no right on the land as the ownership still remained with
the State Government - GOA could not have granted the
lease of the property belonging to the State Government as
B
it was Nazul land meant for the Public Works Department -
The State Government and its functionaries are at liberty to
proceed against the first respondent for its eviction - First
respondent may take recourse to arbitration against the GOA
for any other relief as entitled in law- M.P. Town Improvement c
Trust Act, 1960 - Chapters IV and V - Madhya Pradesh
Nagar Tatha Gramin Adhiniyam, 1973 - ss. 38 and 87.
Doctrines -
Doctrine of Promissory Estoppel -
Inapplicability of - Held: The doctrine/principle cannot be
soundly embedded or treated to be sacrosanct when a public
D
authority carries out a representation or a promise which is
prohibited by law or is devoid of the authority of law -
Administrative Law.
Doctrines - Doctrine of public policy - Invocation of -
E
Grant of lease by Gwalior Development Authority (GOA) in
respect of properly belonging to the State Government -
-"
Challenge to - Held: The doctrine of public policy becomes
enforceable when an action affects or offends public interest
or where injury to the public at large is manifest - On facts,
F
the collective interest in the property could not have been
jeopardised by usurpation of power/authority by GOA - Such
assumption of power by the GOA made the whole action sans
substratum and thereby a nullity.
The Gwalior Development Authority (GOA) had
G
granted· lease of land in public auction. The land in
question was recorded as nazul land meant for the Public
Works Department. The lease was granted to first
respondent-company for the purpose of construction of
a cinema hall. After execution of the lease deed, the first
H
934
SUPREME COURT REPORTS
[2012] 2 S.C.R.
A respondent-company constructed a cinema hall and
commenced business. However, as certain disputes
al'ose between the Directors of the company, it was
eventually resolved by it that the licence for running the
cinema should be surrendered and pursuant themto, the
B Collector cancelled the licenc

## Text

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A
B
[2012] 2 S.C.R. 932
COLLECTOR, DISTI. GWALIOR AND ANOTHER
v.
CINE EXHIBITORS P. LTD. AND ANOTHEI~
(Civil Appeal Nos.281-282 of 2012 )
JANUARY 11, 2012
[DALVEER BHANDARI AND DIPAK MISRA, JJ.]
Town Planning - Nazul land -
Leased .by Gwalior
Development Authority (GOA) in public auction - Subsequent
C termination of the lease by lessor-GOA and lessee-first
respondent asked to hand over possession of the land - Writ
petition by first respondent dismissed by Single Judge of High
Court -Division Bench of High Court, however, held that
cancellation of the lease was unsustainable - Plea raised by
D State that there was no transfer of the land by the State in
favour of GOA, hence, the grant of lease by GOA in favGur of
first respondent was ab initio void and, therefore, there was
no right in favour of the respondent to retain possession
rejected by Division Bench on ground that since the GOA had
E granted lease in auction conducted with the knowledge of the
State, the State was estopped from raising the plea that the ·
land had not been transferred to the GOA - Held: Ncizul land,
unless notified, does not automatically get vested in any
authority or trust - Unless affirmative steps are takem by the
F State Government by issuing a notification changing the
character of the land and transferring it in favour of any
authority, corporation or municipality, it maintains: its own
character, i.e., nazul land - In the case at hand, nothing on
record that the nazul land in question had ever been notified
for transfer in favour of the GOA - GOA never became the
G owner of the land or had the authority to deal with the land and,
therefore, it could not have put the land to auction for any
purpose whatsoever- First respondent cannot assert any right
or advance any claim to remain in possession ancf run the
H
932
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 933
P. LTD.
cinema hall thereon and that too after cancellation of the
A
licence for running the cinema hall, solely on the basis of a
lease granted by its lessor-GOA, a statutory authority, which
had no right on the land as the ownership still remained with
the State Government - GOA could not have granted the
lease of the property belonging to the State Government as
B
it was Nazul land meant for the Public Works Department -
The State Government and its functionaries are at liberty to
proceed against the first respondent for its eviction - First
respondent may take recourse to arbitration against the GOA
for any other relief as entitled in law- M.P. Town Improvement c
Trust Act, 1960 - Chapters IV and V - Madhya Pradesh
Nagar Tatha Gramin Adhiniyam, 1973 - ss. 38 and 87.
Doctrines -
Doctrine of Promissory Estoppel -
Inapplicability of - Held: The doctrine/principle cannot be
soundly embedded or treated to be sacrosanct when a public
D
authority carries out a representation or a promise which is
prohibited by law or is devoid of the authority of law -
Administrative Law.
Doctrines - Doctrine of public policy - Invocation of -
E
Grant of lease by Gwalior Development Authority (GOA) in
respect of properly belonging to the State Government -
-"
Challenge to - Held: The doctrine of public policy becomes
enforceable when an action affects or offends public interest
or where injury to the public at large is manifest - On facts,
F
the collective interest in the property could not have been
jeopardised by usurpation of power/authority by GOA - Such
assumption of power by the GOA made the whole action sans
substratum and thereby a nullity.
The Gwalior Development Authority (GOA) had
G
granted· lease of land in public auction. The land in
question was recorded as nazul land meant for the Public
Works Department. The lease was granted to first
respondent-company for the purpose of construction of
a cinema hall. After execution of the lease deed, the first
H
934
SUPREME COURT REPORTS
[2012] 2 S.C.R.
A respondent-company constructed a cinema hall and
commenced business. However, as certain disputes
al'ose between the Directors of the company, it was
eventually resolved by it that the licence for running the
cinema should be surrendered and pursuant themto, the
B Collector cancelled the licence for running the 1c:inema
hall. After closure of the cinema hall, the less<>r-GDA
terminated the lease and directed the first respe>ndentlessee to hand over possession of the land in question.
C
The writ petition filed by the first respondent-lessee
was dismissed by a Single Judge of the High Cc>urt on
the ground that as there was cancellation of the licence
of the cinema hall, the order of termination of th1e lease
was valid and the first respondent would have an
opportunity of hearing before steps are taken for its
D dispossession. Dissatisfied with the order, the first ·
respondent preferred writ appeal before the Division
Bench. The Division Bench held that 'since no ne>tice of
termination of lease was given despite the samE1 being
imperative and also since there was no commission of
E breach of the express conditions of the lease deed, the
cancellation of the lease was totally unsustainable. With
regard to taking over possession, the Division Bench
OIPined that the authority cannot assume the juris;diction
of taking possession without taking recourse to law. The
F plea raised by the State that there was no transfe1r of the
land by the State in favour of the GOA, hence, the grant
of lease by the GOA in favour of the first respondentcompany was ab initio void and, therefore, there was no
right in favour of the said respondent to retain the
G possession, was rejcted by th~ Division Bench on the
ground that since the GOA had granted lease in auction
that was conducted with the knowledge of the State, it
was estopped from raising the plea that the land had not
been transferred to the GOA.
H
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 935
P. LTD.
The question which arose for consideration in the
A
·instant appeal was whether the Division Bench was
justified in holding that when the GOA had granted the
lease of the land in auction within the knowledge of the
State, the State was estopped from raising any such
ground that the land had not been transferred to the GOA.
B
Allowing the appeals, the Court
HELD: 1. It is settled in law that the doctrine of
promissory estoppel is founded on the principles of
equity and to avoid injustice. However, the said principle
C
cannot be soundly embedded or treated to be sacrosanct
when a public authority carries out a representation or a
promise which is prohibited by law or is devoid of the
authority of law. [Para 10] [944-B-C]
Union of India and others vs. Godfrey Philips India Ltd.
AIR 1986 SC 806: 1985 (3) Suppl. SCR 123; Dr. Ashok
Kumar Maheshwari vs. State of U.P. and another AIR 1998
D .·
SC 966: 1998 (1) SCR 147; Rishabh Kumar vs. State of U.P.
AIR 1987 SC1576: 1987 Suppl. SCC 306; Mis. Sharma
E
Transport vs. Government of A.P. and others AIR 2002 SC
322: 2001 (5) Suppl. SCR 390; S. Sethuraman v. R.
Venkataraman and others AIR 2007 SC 2499; Rajendra
Agricultural University vs. Ashok Kumar Prasad and others ·
(2010) 1 sec 730: 2009 (15) SCR 1168 - relied on.
F
2.1. In the case at hand, admittedly, the land in
question is nazul land meant for the Public Works
Department. In regard to the submission made by
respondent no.1 that the land had vested with the Town
Improvement Trust, Gwalior constituted under the M.P.
G
Town Improvement Trust Act, 1960 and the said vesting
continued under the Madhya Pradesh Nagar Tatha
Gramin Adhiniyam, 1973, on a closer scrutiny of the
schematic conception of the 1960 Act, especially the
provisions contained in Chapter 5 of the 1960 Act dealing
H
936
SUPREME COURT REPORTS
[2012) 2 S.C.R.
. A with the acquisition of land belonging to private persons,
it is demonstrable that the various provisions deal with
the acquisition and improvement of the area under the
planned schemes. It is seemly to note that the~ type of
improvement schemes being delineated under SEiction 31
B of the 1960 Act are fundamentally general improvement
schemes, re-building scheme, re-housing schemes, a
street scheme, deferred street scheme, development
scheme, housing accommodation schemn, town
expansion scheme, drainage or drainage including
C sewage disposal scheme; and playground, stadium and
recreation ground scheme. The aforesaid has nc1thing to
do with the land belonging to the State Government. Any
land coming under the scheme or covered und1~r it has
to be governed by the procedure and guidelines for
0 improvement. It is a different concept altogethel'. [Paras
12, 15] [946-B-C; 949-C-F]
2.2. The lands belonging to the State Government are
dealt with in the Revenue Book Circular and na2:ul lands
are specifically adverted to in Part IV of the said Circular.
E
~t deals with management and disposal of nazul lands
within the limits of Municipal Corporation, municipal
towns and notified areas. The Revenue Book Circular
also stipulates that the classification of land is done at
the time of settlement. The Collector of the district has
F been bestowed with the power to make alterations in the
settlement classifications on the ground t.hat they have
been incorrectly made or that the purpose for which the
land was used had changed in the settlement. In such
1ype of cases, 'Abadi' lands are recorded as nazul lands
G and, accordingly, the vacant spaces are administered as
nazul lands. The aforesaid schematic concept mad with
the language employed in the 1960 Act and the 11973 Act
would clearly reveal that nazul land, unless notifo!d, does
not automatically get vested in any authority or trust. The
H · State Government, from time to time, has be~n issuing
.•
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 937
P. LTD.
notifications to the effect of vesting or transferring of A
nazul land to be part of improvement trust and giving
advance possession to the Town Improvement Trust.
. That apart, the State Government has issued notifications
framing guidelines for distribution of the Nazul plots.
[Paras 18, 19] [954-A-B; 956-F-H; 957-A-B]
B
2.3. Unless affirmative steps are taken by the State
Government by .issuing a notification changing the
character of the land and transferring it in favour of any
authority, corporation or municipality, it maintains its own
C
character, i.e., nazul land. In the case at hand, the land is
recorded as nazul land for the Public Works Department.
Nothing has been brought on record that it had ever
been notified for transfer in favour of the GOA. Thus
analysed, the GOA never became the owner of the land
or had the authority to deal with the land and, therefore,
D
it could not have put the land to auction for any purpose
whatsoever. Ergo, the first respondent cannot assert any
right or advance any claim to remain in possession and
run the cinema hall and that too after cancellation of the
licence, solely on the basis of a lease granted by its
E
lessor, a statutory authority, who had no right on the land
for the simon pure reason that the ownership still
remained with the State Government. When no right lies
with the GOA in respect of the land in view of the
conditions precedent as stipulated in the Revenue Book
F
Circular not having been satisfied and the nature of the
land has remained in a sustained state, no legal sanctity
can be attached to the lease executed by it in favour of
the 1st respondent. The grant is fundamentally ultra vires
and hence, the respondent-company has to meet its G
Waterloo. [Para 21) (957-E-H; 958-A-B]
Akhil Bhartiya Upbhokta Congress vs, State of Madhya
Pradesh and Ors AIR 2011 SC 1834 - relied on.
3. Quite apart from the above, it is condign to note
H
938
SUPREME COURT REPORTS
[2012] 2 S.C.R.
A that in a case of the present nature, the comm<>n law
doctrine of public policy can be invoked. Tht:! said
doctrine becomes enforceable when an action affocts or
offends public interest or where injury to the public at
lal"ge is manifest. As is perceptible, the GOA could not
B have granted the lease of the property belonging to the
State Government as it was Nazul land meant for the
Public Works Department. The collective interest in the
property could not have been jeopardised by usurpation
of power/authority by the GOA. Such assumption of
c power by the GOA makes the whole action sans
substratum and thereby a nullity. Needless to say, any
grant has to have legal sanctity and legitimacy. [Para 22]
[958-C-E]
D
E
F
G
, 4. The State Government and its functionaries are at
liberty to proceed against the first respondent for its
eviction. It is open to the first respondent to take rec:ourse
to the arbitration clause against the GOA for any other
relief as advised in law. [Para 23] [958-F-G]
Case Law Reference:
1985 (3) Suppl. SCR 123 relied on
Para 10
1998 (1) SCR 147
relied on
Para 11
1987 suppl. sec 306
relied on
Para 11
2001 (5) Suppl. SCR 390 relied on
Para 11
AIR 2007 SC 2499
relied on
Para 11
1 2009 (15) SCR 1168
relied on
Para 11
'
AIR 2011 SC 1834
relied on
Para 20
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 281282 of 2012.
H
· From the Judgment & Order dated 28.03.2008 in Writ
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 939
P. LTD ..
Appeal No. 234 of 2007 and order dated 22.09.2010 of the
A
High Court of Madhya Pradesh, Bench at Gwalior in Review
Petition No. 83 of 2010.
B.S. Banthia, Vikas Upadhyay for the Appellants.
Dhruv Mehta, Divyakant Lahoti, Sameer Abhyankar, R.K.
B
Agarwal, Veena Minocha, Arvind Minocha, Randhir Singh, Niraj
Sharma, Neeraj Srivastav for the Respondents.
The Judgment of the Court was del.ivered by
c
DIPAK MISRA, J. 1. Special leave granted in both the
petitions.
2. In these two appeals, the defensibility and legal
pregnability of the judgment and order dated 28th March, 2010
passed by the Division Bench of High Court of Judicature of D
Madhya Pradesh, Jabalpur, Bench at Gwalior in Writ Appeal
· No. 234 of 2007 and the order dated 22nd September, 2010
in R.P. No. 83 of 2010 whereby the Division Bench has
dislodged the order passed by the learned Single Judge in Writ
Petition No. 1718 of 2002 wherein the writ court had declined
E
to interfere with the order dated 9.8.2002 passed by the Chief . ·
Executive Officer, Gwalior Development Authority (for short " the
GOA"), who, by the said order, had terminated the lease of the
first respondent herein and directed it to surrender the
possession of the property within seven days, failing which
· F
appropriate action to be taken against it in accordance with law,
is called in question.
3. The succinct expose' of facts are that the GOA issued
an advertisement for allotment of plot No. 1 admeasuring 40160
G
sq. feet situated in the locality known as Mayur Market for the
purpose of construction of a cinema house and, in the public
auction, the respondent-company, the first respondent herein,
became the highest bidder and accordingly, a lease agreement
was executed on 27 .5.1978 between the GOA and the
respondent company. The said lease agreement was for a
H
940
SUPREME COURT REPORTS
[2012:] 2 S.C.R.
A period of thirty years with the stipulation of a right of renewal
subject to certain conditions. It was asserted in the writ petition
that after execution of the lease deed, the respondent company
constructed a cinema hall and commenced the business. As
certain disputes arose between the directors of thE3 company,
B it was eventually resolved that the licence for running the cinema
should be surrendered and in consonance with the1 resolution,
a letter was issued to the Collector concerned, who cancelled
the licence for running the cinema hall. After closure of the
cinema hall, the GOA, by communication dated 2.8.2002,
c terminated the lease and directed for handing over possession
of the land in question.
4. It was contended before the learned Single! Judge that
the notice for cancellation of lease was not serve!d on it and
the allegations that there had been violation of th13 terms and
D conditions of the agreement were absolutely unsustainable and,
therefore, the eventual act of termination was sensitively
susceptible. It was also urged that as permission was granted
for raising permanent construction, the lease had the character
of a permanent lease and could not have been terminated by
E the GOA. The GOA combated the aforesaid stand put forth by
the respondent-company and countered the same by
contending, inter alia, that there had been violation of the terms
and conditions of the agreement; that the stance of putting the
lease on the pedestal of a permanent lease was sans
F substance; that the plea that the notice for cancellation of lease
was not served was contrary to the documents brought on
record; that reminders were served on the respondentcompany; that the lease was granted for a specific purpose and
when the said purpose had totally melted into extinction, it was
G within the legal province bf the GOA to cancel the lease and
take appropriate steps for eviction.
5. The learned Single Judge took note of the
proponements canvassed by the learned counsel for the parties
and posed the question whether the GOA had the right to
H terminate the lease of the petitioner and, thereafter, scanning
COLLECTOR, OISTT. GWALIOR v. CINE EXHIBITORS 941
P. LTD. [DIPAK MISRA, J.]
the terms and conditions of the lease deed, expressed the view A
that as there has been cancellation of the licence of the cinema
hall, the order of termination of the lease was valid and the
petitioner would have an opportunity of hearing before steps
are taken for its dispossession. Being of this view, he
dismissed the writ petition. Be it noted, a contention was raised
B
before the learned Single Judge that the land in question is
owned by the State but the same was granted on lease by the
GOA, which is absolutely impermissible, however, the learned
Single Judge did not think it appropriate to dwell upon the same
on the foundation that the said question will be decided when c
the State Government takes any action against the petitioner
by the respondent GOA.
6. Being dissatisfied with the aforesaid order, the first
respondent preferred a writ appeal and the Division Bench in
the intra-court appeal expressed the opinion that no notice of D
termination of lease was given despite the same being
imperative and secondly, there was no commission of breach
of the express conditions of the lease deed and hence, the
cancellation was totally unsustainable. With regard to taking
over possession, the Division Bench opined that the authority E
cannot assume the jurisdiction of taking possession without
taking recourse to law. It is apt to note that on behalf of the State,
a stand was vigorously canvassed that when there has been
no transfer of the .land by the State in favour of the GOA, the
grant of lease by the GOA in favour of the first respondentF
company is ab initio void and, therefore, no right flows in favour
of the said respondent to retain the possession. The learned
Judges repelled the said stand on the base that when the GOA
had granted lease in the auction that was conducted with the
knowledge of the State, it is estopped from raising the plea that G
the land had not been transferred to the GOA. Expressing this
view, the appeal was dismissed in the ultimate eventuality.
7. Mr. B.S. Banthia, learned counsel appearing for the
appellants, questioning the sustainability of the impugned H
orders, has raised the following contentions: -
942
SUPREME COURT REPORTS
[2012] 2 S.C.R.
A
(a)
When an issue was raised before the High Court
that the State had not transferred the land in favour
of the GOA and, therefore, the GDA had no
authority to deal with the land in any manner
whatsoever, the said facet should have been dealt
8
with in proper perspective and not brushed aside
on the ground of estoppel.
(b)
The concept of promissory estoppel doe's not have
any play when no competent authority of the
c
Government had transferred the land in favour of the
GOA as per the requisite procedure and as a
sequitur, any step taken by the GOA even in the
presence of an officer will not debar the State to
raise the plea as regards its right, title and interest
0
within the period of limitation.
(c)
The grant of lease being per se wholly vulnerable;
the basic infrastructure collapses and once the
infrastructure is foundered, the super s1tructure is
bound to be razed to the ground. To put it differently,
E
when the GOA had no right to lease the land in·.
question, the respondent-company cannot claim a
better right as a lessee than that of a le~;sor.
(d)
It has become a common phenomenoin to grab
F
public property by adopting maladroit methodology
and, therefore, the Division Bench should not have
scuttled the right of the State and its authorities on
the ground of estoppel which, in fact, does not arise
remotely.
G
(e)
The GOA has unequivocally admitted b1~fore this
Court that the land in question was not transferred
in its favour. The action taken by the State
Government should be given the stamp of approval.
H
8. Mr. Ohruv Mehta, learned senior counsel appe!aring for
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 943
P. LTD. [DIPAK MISRA, J.]
the respondent No. 1, countering the aforesaid submissions,
A
submitted that the approach of the High Court in the writ appeal
cannot be found fault with inasmuch as the scope of the writ
petition out of which the writ appeal emerged was limited, i.e.,
whether the lease could be cancelled by the GOA. It is
canvassed by him that there may be a cavil between the GOA
B
and the State Government but by any stretch of imagination,
the same cannot create any kind. of concavity or dent in the right
of the first respondent to enjoy the benefit of the lease. It is his
further submission that when the State Government has become
totally oblivious of its right, if any, it cannot rise like a phoenix c
and put forth its claim to the property. It is highlighted by him
that under the M.P. Town Improvement Trust Act, 1960 (for short
"the 1960 Act"), and Madhya Pradesh Nagar Tatha Gramin
Adhiniyam, 1973 (for brevity "the 1973 Act") the schemes having
come into existence, the property had vested in the GOA and,
0
therefore, the State Government has no right to interfere and
in that backdrop, the finding recorded in the intra-court appeal
that there has been lack of notice prior to the cancellation of
the lease and further no violation of any of the postulates of the
lease agreement cannot be flawed.
9. Mr. Neeraj Sharma, learned counsel appearing for. the
2nd respondent, the GOA, contended that the land was
recorded as 'Nazul' meant for the Public Works Department
and was never transferred to the GOA and in that background,
E
the question of estoppel or acquiescence by the State
F
Government does not arise. In fact, submits the learned counsel,
by a total mistaken impression, the land was put to auction and
the lease deed was executed in favour of the first respondent.
Additionally, it is propounded by him that if any dispute has
arisen, there is an arbitration clause which would enable the G
respondent- company to agitate its grievances barring eviction
especially when the grant of lease is a void one.
10. The seminal issue that emanates for consideration is
whether the Division Bench is justified in stating in a sweeping
H
944
SUPREME COURT REPORTS
[2012] 2 S.C.R.
A manner that when the GOA had granted the lease of the land
in auction within the knowledge of the State, the State is
estopped from raising any such ground that the land had not
been transferred to the GOA after lapse of thirty years. It is not
disputed before us that the first respondent had not perlected
B its right, title and interest by way of adverse possession as it
could not have been. Evidently, the High Court has proc:eeded
on the basis of the doctrine of promissory estoppel. It is settled
in law that the said doctrine is founded on the principles of
equity and to avoid injustice. The said principle cannot be
c
soun~ly embedded or treated to be sacrosanct when a public
authority carries out a representation or a promise wlhich is
prohibited by law or is devoid of the authority of law. In Union
of India and others vs. Godfrey Philips India Ltd., 1 a1 three
Judge Bench of this Court has crystallised the principle thus:-
0
" .... that there can be no promissory estoppel against the.
legislatur~ in the exercise of its legislative functions nor can
the Government or public authority be debarred by
promissory estoppel from enforcing a statutory prohibition.
It is equally true that promissory estoppel cannot b1~ used
E
to compel the Government or a public authority to ca1rry out
a representation or promise which is contrary to law or
which was outside the authority or power of the officer of
the Government or of the public authority to make"
F
11. In Dr. Ashok Kumar Maheshwari vs .. State of U.P. and
another, a two-Judge Bench of this Court, after referring1 to the
dec:ision in Rishabh Kumar vs. State of U.P. 3, proceeded to
state as follows: -
"21. This principle was reiterated in Union of India 11. R.C.
G
D'Souza AIR 1987 SC 1172 : (1987) 2 SCC 211, where
a retired army officer was recruited as Assistant
1.
AIR 1986 SC 806.
2.
AIR 1998 SC 966.
H
3.
AIR 1987 SC 1576.
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 945
P. LTD. [DIPAK MISRA, J.]
Commandant on temporary basis and was called upon to
A
exercise his option for regularisation contrary to the
statutory rules. It was held that it would not amount to
estoppel against the Department.
22. Whether a Promissory Estoppel, which is based on a
'promise' contrary to law can be invoked has already been
considered by this Court in Kasinka Trading v. Union of
India, (1995) 1 SCC 274 : (1995 AIR SCW 680) as also
B
in Shabi Construction Co. Ltd. v. City & Industrial
Development Corporation (1995) 4 SCC 301 wherein it
C
is laid down that the Rules of "Promissory Estoppel"
cannot be invoked for the enforcement of a 'promise' or a
'declaration' which is contrary to law or outside the authority
or power of the Government or the person making that
promise."
In this context, we may profitably refer to the decision of this
Court in Mis. Sharma Transport vs. Government of A.P. and
others" , wherein a three-Judge Bench opined that it is equally
settled law that promissory estoppel cannot be used compelling
D
the Government or a public authority to carry out a
E
representation or promise which is prohibited by law or which
is devoid of the authority or power of the officer of the
Government orthe public authority to make. In this regard, we
may also usefully refer to the observations made in S.
Sethuraman vs. R. Venkataraman and others5 which is to the
F
effect that if jurisdiction cannot be conferred by consent, it
cannot clothe the authority to exercise the same in an illegal
manner. Recently, in Rajendra Agricultural University vs.
Ashok Kumar Prasad and others, 6 it has been laid down that
non-compliance with the mandatory statutory requirement will
G
make the act invalid and cannot be regarded as a
representation held. out by the Government creating any right
4.
AIR 2002 SC 322.
5.
AIR 2007 SC 2499.
a.
c2010) 1 sec 130
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A to seek the benefit by inviting the doctrine of promissory
estoppel against the government.
12. In the case at hand, admittedly, the land is nazul land
meant for the Public Works Department. It had been urged
8
before the High Court that the land in question was not
transferred in favour of the GOA. The submission of Mr. Mehta,
learned senior counsel for the respondent No. 1, is tha1t the land
had vested with the Town Improvement Trust, Gwalior
constituted under the 1960 Act and the said vesting continued
C under the 1973 Act. To appreciate the said submission, we
may analyse the scheme of the 1960 Act. The saidl Act was
enacted to consolidate and amend the law relating to the
establishment of improvement trust for the purpose of making
and executing town improvement scheme in certain towns of
Madhya Pradesh. Chapter II of the Act deals with the
D Constitution of the Trust. Chapter Ill provides for conduct of
business. Chapter IV deals with improvement schemes.
Various schemes are being enumerated under various
provisions in the said chapter. Section 52 which occurs in
Chapter IV provides for issuance of notification of sainction of
E improvement schemes and order regarding vesting a property
in the Trust. The said provision being relevant is reproduced
below: -
"52. Notification of sanction of improvement scheme and
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order regarding vesting of property in the Trust. - (1)
Whenever the State Government sanctions an
improvement scheme, it -
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(a)
shall announce the fact by notificaition and
except in the case of a deferred street
scheme, development scheme, or town
expansion scheme, the Trust shall forthwith
proceed to execute the same; and
(b)
may order that any street, square, park, open
space or other land, or any other part thereof,
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 947
P. LTD. [DIPAK MISRA, J.]
which is the property of the Government and
A
managed by the Central Government or the
State Government shall, subject to such
condition as it may impose, vest in the Trust
for the purpose of the scheme.
(2) The publication of a notification under sub-section (1)
in respect of any scheme shall be conclusive evidence that
the scheme has been duly framed and sanctioned."
B
On scanning of the aforesaid provision, it is luminous that subsection (2) of Section 52 postulates that publication of a
C
notification under sub-section (1) in respect of any scheme shall
be conclusive evidence that the scheme has been duly framed
and sanctioned.
13. Chapter V of the Act deals with acquisition and
D
disposal of land. Section 67 empowers the Trust to acquire by
purchase, lease or exchange any land within the area
comprised in a sanctioned scheme for many persons under an
agreement with such person. Section 68 provides for notice of
acquisition of land. As the learned senior counsel for the
E
respondent has placed heavy reliance on the said provision,
the same is reproduced below :-
. "68. Notice acquisition of land- (1) If in the opinion of the
Trust any land is required for the purposes of any scheme
sanctioned by the State Government under Section 51, the
F
Trust shall by a notice published in the Gazette and in such
other manner may be prescribed, signify its intention to
acquire such land. Such notice shall specify the place
where and the hours during with the maps and
specifications of the land proposed to be acquired may
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be inspected.
(2) The owner of the land which has been notified under
sub-section (1) or any other person interested therein may
object to the acquisition of such land within 80 days after
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the publication of the notice in the Gazette.
(3) Every objection under sub-section (2) shall be made
to the Trust in writing and the Trust shall give the objector
an opportunity of bejng heard in person or by a duly
authorised agent or pleader and shall after hearing all such
objections and making such further inquiry, if may, as may
be necessary," take such decision as it may deem fit."
On a plain reading of the aforesaid provision, it is clear a:s noon
day that if in the opinion of the Trust any land is required for
C the purpose of any scheme sanctioned by the State Government
under Section 51, the Trust shall by notice published in the
Gazette and by any such other manner as may be prescribed,
signify its intention to acquire such land. Such notice, as
stipulated therein, shall specify the place etc. The rest of the
D provision is, in a way, procedural in nature. Section 69 makes
a provision whereunder the Trust may apply to the State
Government for sanction to acquire the land. Sectiion 70
provides for procedure for sanction of acquisition. Secltion 71
provides for notification of acquisition and vesting of land in the
E Trust.
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14. Mr. Mehta has drawn immense inspiration from Section
71 which is as follows:-
"71. Notification of acquisition and vesting of land in
Trust - (1) After the acquisition of land is sanctioned by
the State Government under Section 70 the Tru:st may
acquire such land by publishing in the Gazette a notice
stating that it had decided to acquire the land and has
obtained the sanction of the State Government for the
acquisition thereof.
(2) When a notice under sub-section (1) is published in the
Gazette the land shall, on and from the date c1f such
publication, vest absolutely in the Trust free from all
encumbrance.
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 949
P. LTD. [DIPAK MISRA, J.]
(3) Where any land is vested in the Trust under sub-section
A
(2), the Trust may by notice in writing , order any person
who may be in possession of the land to surrender or
deliver possession thereof to the Trust or any person duly
authorised by it in this behalf within thirty days of the service
of the notice.
B
(4) If any person refuses or fails to comply with an order
made under sub-section (3), the Trust may take
possession of the land and may for that purpose cause to
be sued such force as may be necessary."
c
15. On a closer scrutiny of the schematic conception of the
Act, especially the provisions contained in Chapter 5 of the
1960 Act dealing with the acquisition of land belonging to
private persons, it is demonstrable that the various provisions
deal with the acquisition and improvement of ttie area under o
the planned schemes. It is seemly to note that the type of
improvement schemes being delineated under Section 31 of
the 1960 Act are fundamentally general improvement schemes,
re-building scheme, re-housing schemes, a street scheme,
deferred street scheme, development scheme, housing
E
accommodation scheme, town expansion scheme, drainage or
drainage including sewage disposal scheme; and playground,
stadium and recreation ground scheme. The aforesaid has
nothing to do with the land belonging to the State Government.
Any land coming under the scheme or covered under it has to
F
be governed by the procedure and guidelines for improvement.
It is a different concept altogether.
16. We will be failing in our duty if we do not refer to certain
provisions, namely, Sections 38 and 87 of the 1973 Act as our
attention has been drawn by Mr. Mehta, learned counsel for the
G
respondent No. 1. They read as follows:
"38. Establishment of Town and Country Development
Authority. - (1) The State Government may, by notification,
establish a Town and Country Development Authority by
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. such name and for such area as may be specified in the
notification.
(2) The duty of implementing the proposal in the
development plan, preparing one or more town
development schemes and acquisition and development
of land for the purpose of expansion or improvement of the
area specified in the notification under sub-section (1)
shall, subject to the provision of this Act vest in the! Town
and Country Development Authority established for the said
area.
' 1
Provided that the duty imposed on the Town and
Country Development Authority shall, till that authority is
established for any area under sub-section (1 ), be
performed by the local authority having jurisdiction over
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such area as if it were a Town and Country Development
Authority established under this Act.
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(3) On the establishment of the Town and Country
Development Authority for the area to which the proviso
to sub-section (2) applies, the following consequences
shall ensue in relation to that area, namely : -
(i) all assets and liabilities acquired and incurred by
the local authority in the discharge of the duty under the
proviso to sub-section (2) shall belong to and be clemand
to be the assets and liabilities of the Town and Country
Development Authority established in place of such local
authority;
(ii) all records and papers belonging to the local
authority referred to in clause (i) shall vest in and be
transferred to the Town' and Country Development Authority
established in its place.
xxx xxx xxx xxx
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87. Repeal, Savings and construction of references. (1)
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 951
P. LTD. [DIPAK MISRA, J.]
As from the date of, -
(a}
the coming into force of the provisions ofChapter
II the reference to ChiefTownPlanner
in
any
enactment for the timebeing in force, shall be
A
construed as areference to the Director;
B
(b}. the Constitution of a planning area, the following
consequences shall ensue.namely -
(i) The Madhya Pradesh Town PlanningAct, 1948
(No. 17 of 1948), shall standrepealed in
such C
area;
(ii) any land use map, draft development or
development plan prepared under the said Act,
shall be deemed to have beenprepared under this 0
Act and all papersrelating thereto shall stand
transferred tothe Director;
(C)
the establishment of the Town and Country
Development Authority for any area the following
consequences shall ensue in relation to that, area,
E
namely-
(i) the Madhya Pradesh Town Improvement Trust Act, 1960
(No. 14 of 1961 ), shall stand repealed in its application to
the said area,
F
(ii) the Town Improvement Trust functioning within the
jurisdiction of the Town and Country Development Authority
so established shall stand dissolved and any Town
Improvement Scheme prepared under the said Act, shall
in so far as it is not inconsistent with the provisions of this G
Act be deemed to have been prepared under this Act,
(iii) all assets and liabilities of the Town Improvement Trusts
shall belong to and be deemed to be the assets and
liabilities of the Town and Country Development Authority H
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c
D
E
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[2012]1 2 S.C.R.
established in place of such Town Improvement Trust under
Section 38;
iii-a) grants and contributions payable to the Town
Improvement Trust shall continue to be payable to the Town
and Country Development Authority establishe!d in place
of such Town Improvement Trust under Section 38;
(iv) all employees belonging to or under the control of the
Town Improvement Trust referred to in sub-clause (ii)
immediately before the date aforesaid shall be deemed
to be the employees of the Town and Country Development
Authority established for such area under SecUon 38;
Provided that the terms and conditions oif service of
such employees shall be the same until altered by the Town
and Country Development Authority with th1:1 previous
sanction of the State Government :
Provided further that no sanction under the foregoing
proviso shall be accorded by the State Govemment until
the person affected thereby is given a n~asonable
opportunity of being heard;
·
(v)
all records and papers belonging to the Town
Improvement Trusts referred to in sub-clause (ii)
shall vest in and be transferred to the! Town and
Country Development Authority established in its
place under Section 38.
(2)
Notwithstanding the repeal of the Madhya Pradesh
Town Improvement Trusts Act, 1960 (No. 14 of
1961) (hereinafterreferred to as the repealed Act),
undersub-clause (i) of clause (c) of sub .. section (1),
(a) all cases relating to compensation in respect of
acquisition and vesting of land in the Town
Improvement Trust under Section 71 of the
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 953
P. LTD.