# JAL MAHAL RESORTS P. LTD v. K.P. SHARMA & ORS

- **Citation:** [2014] 11 S.C.R. 765
- **Court:** Supreme Court of India
- **Decided:** 2014-04-25
- **Case number:** Civil Appeal No. 4912 of 2014
- **Bench:** Gyan Sudha Misra, Pinaki Chandra Ghose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jal-mahal-resorts-p-ltd-v-k-p-sharma-ors-29464
- **Pages:** 90

## Headnote

A
B
Public Interest Litigation - Grant of lease of 100 acres of
land for 99 years - By State Government- To private party C
- Around Mansagar Lake in Jaipur - For restoration and
conservation of the lake into an attractive tourist destination
- Grant of lease challenged in PIL in High Court - Petitions
allowed - On appeal, held: The public interest litigations
clearly fail the test of utmost good faith - Sufficient economic
D
diligence were used before issuing the Request for Proposal
and subsequently accepting appellant's highest financial bid
- There was no ma/a fide in the decision making process -
Entire 100 acres was not part of the /akebed - As per revenue
entries only 8.65 acres land is classified as 'gairmumkin ta/ab'
E
(fakebed) and the balance land that is 100 acres less 8.65
acres is recorded as 'Banjar' - Therefore area of 8. 65 acres
shall stand re-transferred to the Government - Area of 14. 15
acres although shall be notionally treated as part of the lease
deed, it shall be treated as a construction-free zone -
F
Remaining portion of the land, forming part of the lease-deed
shall remain intact to be used by the lease-holder as per the
terms and conditions of the lease-deed already executed -
However, grant of lease for 99 years is not permissible under
Rules - The maximum period for the lease-deed as per the
G
Rules could not have been more than 30 years - Therefore,
the period of lease reduced to a period of 30 years which
should ordinarily start from the date of its execution - But in
view of the fact that much time has lapsed after execution of
765
H
766
SUPREME COURT REPORTS
[2014] 11 S.C.R.
A the lease deed in 2005 due to delay on account of the
litigation, period of 30 years shall be counted from the date
of the instant judgment - After expiry of 30 years of lease
period and in case the lease deed is not renewed in favour
of th~ present /ease-holder, the State to compensate them at
B the market value of the project including compensation for the
loss of business and profit - Jaipur Development Authority
Act 1982 - Rajasthan Improvement Trust (Disposal of Urban
Land) Rules, 1974 - r. 18
JudicifJ/ review - scope of - Held: The power of judicial
C review of the executive and legislative action must be kept
within the bounds of constitutional scheme, in consonance
with the principle of separation of powers - Interference with
the decisions of the State Authorities which are based on the
opinion of the experts, technocrats, and the State
D administrators would lead to a friction among the three organs
of the State and would affect the principle of separation of
powers.
Partly allowing the appeals, the Court
E
HELD: 1. The power of judicial review of the
executive and legislative action must be kept within the
bounds of constitutional scheme so that there may not
be any occasion to entertain misgivings about the role
of judiciary in out-stepping its limit by unwarranted
F judicial activism. The democratic, set-up to which polity
is so deeply committed cannot function properly unless
each of three organs appreciate the need for mutual
respect and supremacy in their respective fields.
However, it does not mean that howsoever gross or
G abusive may be an administrative action or a decision
which is writ large on a particular activity at the instance
of the State or any other authority connected with it, the
Court should remain a passive, inactive and a silent
spectator. There has to be a boundary line while
H
•
• JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
767
examining the correctness of an administrative decision
A
taken by the State or a Central Authority after due
deliberation and diligence which do not reflect
arbitrariness or illegality in its decision and execution. If
such equilibrium in the matter of governance gets
disturbed, development is bound to be slowed down and
B
disturbed spt<cially in an age of economic liberalization
wherein global players are also- involved as per policy
decision. [Paras 116 and 1

## Text

_Characters 0–39,722 of 185,966. This is a partial read: ask again with offset=39722 for what follows._

•
[2014] 11 S.C.R. 765
JAL MAHAL RESORTS P. LTD.
v.
K.P. SHARMA & ORS.
(Civil Appeal No. 4912 of 2014 ETC.)
APRIL 25, 2014
[GYAN SUDHA MISRA AND
PINAKI CHANDRA GHOSE, JJ.]
A
B
Public Interest Litigation - Grant of lease of 100 acres of
land for 99 years - By State Government- To private party C
- Around Mansagar Lake in Jaipur - For restoration and
conservation of the lake into an attractive tourist destination
- Grant of lease challenged in PIL in High Court - Petitions
allowed - On appeal, held: The public interest litigations
clearly fail the test of utmost good faith - Sufficient economic
D
diligence were used before issuing the Request for Proposal
and subsequently accepting appellant's highest financial bid
- There was no ma/a fide in the decision making process -
Entire 100 acres was not part of the /akebed - As per revenue
entries only 8.65 acres land is classified as 'gairmumkin ta/ab'
E
(fakebed) and the balance land that is 100 acres less 8.65
acres is recorded as 'Banjar' - Therefore area of 8. 65 acres
shall stand re-transferred to the Government - Area of 14. 15
acres although shall be notionally treated as part of the lease
deed, it shall be treated as a construction-free zone -
F
Remaining portion of the land, forming part of the lease-deed
shall remain intact to be used by the lease-holder as per the
terms and conditions of the lease-deed already executed -
However, grant of lease for 99 years is not permissible under
Rules - The maximum period for the lease-deed as per the
G
Rules could not have been more than 30 years - Therefore,
the period of lease reduced to a period of 30 years which
should ordinarily start from the date of its execution - But in
view of the fact that much time has lapsed after execution of
765
H
766
SUPREME COURT REPORTS
[2014] 11 S.C.R.
A the lease deed in 2005 due to delay on account of the
litigation, period of 30 years shall be counted from the date
of the instant judgment - After expiry of 30 years of lease
period and in case the lease deed is not renewed in favour
of th~ present /ease-holder, the State to compensate them at
B the market value of the project including compensation for the
loss of business and profit - Jaipur Development Authority
Act 1982 - Rajasthan Improvement Trust (Disposal of Urban
Land) Rules, 1974 - r. 18
JudicifJ/ review - scope of - Held: The power of judicial
C review of the executive and legislative action must be kept
within the bounds of constitutional scheme, in consonance
with the principle of separation of powers - Interference with
the decisions of the State Authorities which are based on the
opinion of the experts, technocrats, and the State
D administrators would lead to a friction among the three organs
of the State and would affect the principle of separation of
powers.
Partly allowing the appeals, the Court
E
HELD: 1. The power of judicial review of the
executive and legislative action must be kept within the
bounds of constitutional scheme so that there may not
be any occasion to entertain misgivings about the role
of judiciary in out-stepping its limit by unwarranted
F judicial activism. The democratic, set-up to which polity
is so deeply committed cannot function properly unless
each of three organs appreciate the need for mutual
respect and supremacy in their respective fields.
However, it does not mean that howsoever gross or
G abusive may be an administrative action or a decision
which is writ large on a particular activity at the instance
of the State or any other authority connected with it, the
Court should remain a passive, inactive and a silent
spectator. There has to be a boundary line while
H
•
• JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
767
examining the correctness of an administrative decision
A
taken by the State or a Central Authority after due
deliberation and diligence which do not reflect
arbitrariness or illegality in its decision and execution. If
such equilibrium in the matter of governance gets
disturbed, development is bound to be slowed down and
B
disturbed spt<cially in an age of economic liberalization
wherein global players are also- involved as per policy
decision. [Paras 116 and 117] [847-F-H; 848-A-C]
2. Although the Courts are expected very often to
enter into the technical and administrative aspects of the
C
matter, it has its own limitations and in consonance with
the theory and principle of separation of powers, reliance
at least to some extent to the decisions of the State
Authorities specially if it is based on the opinion of the
experts reflected from the project report prepared by the
D
technocrats, accepted by the entire hierarchy of the State
administration, acknowledged, accepted and approved by
one Government after the other will have to be given due
credence and weightage. In spite of this, if the Court
chooses to overrule the correctness of such administrative
E
decision and merits of the view of the entire body including
the administrative, technical and financial experts by taking
note of hair splitting submissions at the instance of a PIL
petitioner without any evidence in support thereof, the PIL
petitioners shall have to be put to strict proof and cannot
F
be allowed to function as an extraordinary and extra
judicial ombudsmen questioning the entire exercise
undertaken by an extensive body which include
administrators, technocrats and financial experts. This
might lead to a friction if not collision among the three
G
organs of the State and would affect the principle of
governance ingrained in the theory of separation of
powers. [Para 116] [847-A-E]
MP. Oil Extraction v. State of M.P. 1997 (1) Suppl. SCR
671 = 1997 (7) SCC 592 -relied on
H
768
SUPREME COURT REPORTS
[2014] 11 S.C.R.
A
3. Unless the Detailed Project Report, Master Plan of
Jaipur, Revenue Record indicating the nature of land that
the project was fraught with risk of environmental
degradation which could establish with facts & figures
that the decision is not in public interest, interference by
B the ·Court adopting an over all view smelling foul play at
every level of administration is bound to make the
governance an impossibility. Therefore, the courts
although would be justified in questioning a particular
decision if illegality or arbitrariness is writ large on a
c particular venture, excessive probe or restraint on the
activity of a State is bound to derail execution of an
administrative decision even though the same' might be
in pursuance of a policy decision supported by other
cogent materials like survey and ·search by the reliable
0 Expert Agency of a State after which the State Project or
private and public partnership project is sought to be
given effect to. [Para 118] [849-A-C]
4. On perusarof the background and other materials
on record, it could be noticed that the genesis of
E restoration and conservation of Mansagar Lake goes
back to 1984 whereby the efforts of the State have been
directed towards restoring and developing the largest
water body in Jaipur into an attractive public interest
destination for attracting tourists from all over the world.
F The lease rent model had always been the consistent
approach of the State since 1999 when restoration was
first envisaged. It is inconceivable that this model could
be created to assist or benefit the bidder like the appellant
lease-holder, who came in to the picture for the first time
G only in year 2003. Sufficient economic diligence were
used before issuing the Request for Proposal and
subsequently accepting appellant's highest financial bid.
Thus, there was no ma/a fide in the decision making
process. The public interest litigations clearly fail the test
H
•
•
JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
769
of utmost good faith. [Paras 100, 101, 104, 105] [836-H;
A
837-A; 839-C-D; 840-G-H; 841-C]
5. The plea that 100 acres land lease to the petitioner
was part of the lakebed, does not get supported from the
revenue entries placed on record or any other material
8
which makes it clear and establishes that only 13 bighas
17 biswas is classified as 'gairmumkin ta/ab' (lakebed)
which would be approximately 8.65 acres. However, the
balance land that is 100 acres less 8.65 acres is in fact
recorded as 'Banjar' in the revenue record and not
lakebed. In order to avoid the controversy, it would be
C
just and appropriate to slash 8.65 acres land which has
been classified as 'gairmumkin ta/ab' from the lease hold
area and the same shall be within the control and domain
of the Government of Rajasthan which will be free to
reconvert this area into the lake area. In so far as 14.15
D
acres of land recorded as barren land/banjar is
concerned, this area shall be treated as a construction
free zone and neither party i.e. the State of Rajasthan nor
the lessee/appellant herein shall be permitted to raise any
construction thereon. this area shall be used as a public
E
promenade (walk way) for the use of the public. In so far
as the balance area of land pertaining to the lease deed
is concerned, the respondents/PIL petitioners have not
been able to lead any iota of evidence or material to prove
that this area was at all or at any point of time lakebed or
F
wetland. [Paras 109, 111, 112, 113) [843-F-H; 844-F-H; 845A-D]
re: Construction of Park at NO/DA Near Okhla Bird
Sanctuary Anand Arya & Anr. vs U.0.1. & ors. 2010 (15)
G
SCR 783 = 2011 (1) SCC 744 - relied on
6. The area of 8.65 acres shall stand re-transferred to
the Government of Rajasthan which shall be recarved
and added to the lake area and the same shall be
H
770
SUPREME COURT REPORTS
[2014] 11 S~C.R.
A maintained by the competent authorities of the State.
However, the area of 14.15 acres although shall be
notionally treated as part of the lease deed, it shall be
treated as a construction free zone. Remaining portion
of the land forming part of the' lease deed shall remiiin
B intact to be used by the appellant as per the terms and
conditions of the lease deed already executed. However,
it is clarified that Mansagar Lake Restoration Project if
undertaken by the State or the Ministry of Environment,
the same shall not get affected by virtue of the lease deed
c in any manner. [Para 126] [852-D-G]
7. Since the land which is a part of the lease hold area
barring 2 chunks viz. 8.65 and 14.15 acres of land, the
Wetland Rules of 2010 shall not apply to the project since
environment clearance had already been issued under
D PIA 2006 prior to commencement of the project. No
dispute relating to application of the Wetland Rules 2010
shall be allowed to be raised hereinafter with
retrospective effect in regard to the lease hold area of the
land which has been granted for development of the
E project and could not be proved to be wetland barring
22.80 acres. [Para 127] [852-H; 853-A, C]
8. The period of the lease deed had been finally fixed
as 99 years which could not have been done by the State
F Government as that clearly converts the lease deed into
a perpetual lease. When the tender was floated for
granting the lease deed, the maximum period for the lease
deed as per the Rule could not have been more than 30
years yet the tender was floated for a period of 60 years
G which was later extended to 99 years. This is contrary to
the rules. Therefore, the period of lease shall stand
reduced to a period of 30 years only which could be the
maximum period of the lease for the land under the rules
which should start ordinarily from the date of its
H
•
• JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
771
execution so as to expire on or before the period of 30
A
years. But in view of the fact that much time has lapsed
after execution of the lease deed in 2005 due to which
· only Phase-I of the project could start after which it got
stuck and the project is in a state of limbo due to delay
on account of the litigation started at the behest of the
B
respondent/PIL petitioners who questioned the validity of
the lease deed executed and finally succeeded in getting
it set aside. Therefore, the lease deed which could not be
made effective in view of the intervening litigation due to
which the Project got delayed, it is legally just and c
appropriate to direct that' the period of 30 years of the
lease shall now be counted from the date of this judgment
and order. [Paras 121 and 122] [850-D-H; 851-A-B]
9. The lease may be extended by the State
Government for such o.ther period as may be considered
D
legally viable based on the rules and regulations at the
relevant period. After expiry of 30 years of lease period
and in case the lease deed is not renewed in favour of
the appellant, the State Government shall compensate the
appellants at the market value of the project including
E
compensation for the loss of business and profit. [Para
124) [851-F-G]
BSN Joshi & Sons vs. Nair Coal Services Ltd. & Ors.
2006 (8) Suppl. SCR 11 = (2006) 11 SCC 548; Poddar Steel
F
Corporation vs. Ganesh Engineering Works & Ors. 1991 (2)
SCR 696 = (1991) 3 SCC 273; Natural Resources Allocation
(2012) 10 SCC 1; Sachidanand Pandey vs. State of West
Bengal (1987) 2 SCC 295; M.P. Oil Extraction vs. State of
M.P. (1997) 7 SCC 592; Kasturi Lal Lakshmi Reddy v. State
G
of Jammu Kashmir (1980 4 SCC 1 - referred to.
R.D. Shetty vs. Airports Authority of India 1979
(3) SCR 1014 = 1979 (3) SCC 489; State of M.P. vs. Nandlal
Jaiswal 1987 (1) SCR 1 = 1986 (4) sec 566; Century
H
772
SUPREME COURT REPORTS
[2014] 11 S.C.R.
A Spinning and Manufacturer Company Limited vs. Nagar
Municipal Corporation 1970 (2) SCR 854 =1970 (1) SCC
582; Tata Cellular Vs. Union of India, 2010 (15) SCR 783 =
1994 (6) SCC 680; A.K. Roy vs. Union of India 1982 (2) SCR
272 = 1982 (1) SCC 271 ; Union of India vs. Shree Gajanan
B Maharaj Sansthan 2002 (3) SCR 600 = 2002 (5) SCC 44 -
cited.
c
D
E
F
G
H
Case Law Reference:
1979 (3) SCR 1014
1987 (1) SCR 1
1970 (2) SC.R 854
1994 (6) sec 680
1994 (6) sec 680
1982 (2) SCR 272
2002 (3) SCR 600
cited
cited
cited
cited
cited
cited
cited
2006 (8) Suppl. SCR 11
referred to
1991 (2) SCR 696
referred to
(2012) 10 sec 1
referred to
(1987) 2 sec 295
(1997) 1 sec 592
(1980 4 sec 1
2010 (15) SCR 783
referred to
referred to
referred to
relied on
1997 (1) Suppl. SCR 671 relied on
para 48
para 48
para 51
para 59
para 59
para 75
para 75
para 98
para 98
para 102
para 102
para 102
para 102
para 110
para 116
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4912 of 2014.
•
•
JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
773
From the Judgment and Order dated 17/05/2012 in
A
DBCWP No. 6039/2011 of the High Court of Rajasthan at
Jaipur.
WITH
Civil Appeal Nos. 4913 & 4914 of 2014
Dr. A. M. Singhvi, Shyam Divan, Kamaldeep Dayal, Ankur
Saigal, Abhinav Agrawal, Arvind Jain, Harsh Kulshrestha, E. C.
Agrawala, Ruchi Kohli for the Appellant.
S. P. Singh, Jaydeep Gupta, P. S. Narsimha, Mohan
B
c
Prasad Gupta, S. Nagarajan, S. N. Terdal, B. Krishna Prasad,
Aruneshwar Gupta, lrshad Ahmad, K. B. Rohtagi, Mahesh
Kasana, Apama Rohatgi Jain, Avinash Kumar, Mukul Kumar,
Ajay Choudhary, Ankit R. Kothari, Ajay Singh, lshan, Rakesh
D
Dahiya, Aditya Jain, Brig. M. L. Khatter for the Respondents.
The Judgment of the Court was delivered by
GYAN SUDHA MISRA, J. 1. Leave granted.
2. These appeals by way of special leave have been
E
preferred against the common judgment and final order dated
17.5.2012 passed by the High Court of Judicature for Rajasthan
at Jaipur Bench, Jaipur in three public interest litigation petitions
filed by the petitioners K.P. Sharma, Dharohar Bachao Samiti,
Rajasthan and Heritage Preservation Society respectively
F
against the State of Rajasthan and the beneficiary· of the project
who was respondent No.7 in the High Court and is now the
petitioner/appellant in Civil Appeal (arising out of SLP(c)
No.17701/2012. The three petitions were D.B. Civil Writ (PIL)
Petition·No.6039/2011, D.S. Civil Writ (PIL) Petition No.5039/
G
2010 and D.B. Civil Writ (PIL) Petition No.4860 of 2010
whereby the Division E!ench of the High Court was pleased to
cancel an Environment and Monument Improvement/
Preservation and Tourism Development Project at Jaipur
by declaring it as illegal which was awarded to the petitioner/
H
774
SUPREME COURT REPORTS
[2014] 11 S.C.R.
A appellant Jal Mahal Resorts Private Limited via global tender .
floated in 2003 and finally granted in 2005 after all requisite
approvals as per the petitioner/appellant under the
Environmental Law including Environment Impact Assessment
under the Environment Protection Act and the Notifications
B issued thereunder of the Rajasthan Pollution Control Board.
However, in view of the cancellation of the project, the High
Court has directed immediate dismantling and removal of the
entire project and diversion of the two drains which was done
to purify waters of a man made artificial water body and
C detritus.
3. Other three Special Leave Petition bearing SLP (Civil)
Nos.22467/2012, 22820/2012 and 24341/2012 had also been
preferred by the State of Rajasthan challenging the impugned
judgment and order of the High Court referred to hereinbefore.
D But after the arguments were finally advanced by the learned
Attorney General and the same also stood concluded,.
permission of this Court was sought by the senior counsel Sri
Jaydeep Gupta to withdraw these special leave petitions filed
by the State of Rajasthan which were permitted by this Court
E vide order dated 05.02.2014. The petitions preferred by the
State of Rajasthan assailing the impugned judgment and order
thus stand dismissed as withdrawn. However, Sri Gupta
submitted that he can still address the Court on merit in the
connected special leave petitions bearing SLP (Civil)
F
Nos.17701 of 2012, 19239/2012 and 19240/2012 preferred by
the petitioner/appellant Jal Mahal Resorts Pvt. Ltd. & Ors.
against the PIL petitioners before the High Court since the State
of Rajasthan is still a party· respondent in these matters and
hence it can support or oppose the impugned judgment of the
G High Court in spite of withdrawal of the special leave petition
filed by the State assailing the judgment and order of the High
Court. However, at this juncture we refrain from expressing
further on its implication and-would deal with the same, if
necessary, at the appropriate stage .
. H
•
• JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
775
[GYAN SUDHA MISRA, J.]
4. In so far as the appeals preferred by the appellant-Mis.
A
Jal Mahal Resorts Private Limited is concerned, we have
noticed that the appeal has been preferred against the
common judgment and order of the High Court under challenge
herein whereby the writ petitions which were filed by the
respondents as public interest litigation bearing DB (CWP)
B
No.6039/2011 entitled Prof. K.P. Sharma vs. State of
Rajasthan and Ors as also DB (CWP) PIL No. 5039/2010
entitled Dharohar Bachao Samiti Rajasthan vs. State of
Rajasthan and Ors. as also the 3rd writ petition bearing DB
(CWP) PIL No. 4860/2010 entitled Heritage Preservation c
Society Rajasthan and Anr. vs. State of Rajasthan and Ors.
have been allowed by the Division Bench of the High Court and
resultantly the Mansagar Lake Precincts Lease Agreement
dated 22.11.2005 awarding 100 acres of land on lease for a
period of 99 years to the respondent No.7/the appellant herein/
0
M/s. Jal Mahal Resorts Private Limited was declared illegal and
void. As a consequence of the same, the appellant Jal Mahal
Resorts Private Limited has been directed to bear costs to be
incurred in restoration of the original position of 100 acres of
land in removing the soil filled in by it and to restore back the
E
possession of land to the Rajasthan Tourism Development
Corporation ('RTDC' for short) which in turn will hand over the
land to Jaipur Development Authority ('JOA' for short), Jaipur
Municipal Corporation ( 'JMC' for short) and the State of
Rajasthan. The appellant has further been directed to
immediately remove all sedimentation and settling"tanks from
F
the Mansagar Lake Basin and to realize costs from M/s. Jal
Mahal Resorts Private Limited and to examine restoring
position of Nagtalai and Brahampuri Nala (drains) to their
original position as redesigned by RUIDP under Mansagar
Lake Restoration Plan in consultation with the Ministry of G
Environment and Forests ('MoEF' for short) of the Central
Government. The respondent authorities of the State of
Rajasthan have been further directed to monitor, maintain and
refix boundaries of the Mansagar Lake in its full original length,
breadth and depth in consultation with the MoEF of Central
H
•
776
SUPREME COURT REPORTS
[2014] 11 S.C.R.
A Government and not to reduce normal water level. All
encroachment.s made in the attachment area of the Mansagar
Lake have be.en ordered to be removed immediately and the
control erected by appellant Mis. Jal Mahal Resorts"Private
Limited into the lake is ordered to be dismantled and costs
B have been ordered to be realized from the appellant Mis. Jal
Mahal Resorts Private Limited. All the three writ petitions were
thus disposed of by the High Court.
5. Before we deal with the respective case and counter
case of the contesting parties, it may be relevant and
C appropriate to state the background of the matter giving rise
to these appeals. The writ petitions which ·have been dealt with
by the High Court had been fileq in public interest to quash Jal
Mahal Tourism Project and cancel Mansagar Lake Precincts
Lease Agreement dated 22.11.2005 giving 100 acres of land
D on lease for a period of 99 years to the respondent No.7.
(appellant herein M/s. Jal Mahal Resorts Private Limited and
Jal Mahal Lease and License Agreement dated 22.11.2005).
In Writ Petition No. 6039/2011 which was filed by Prof. K.P.
Sharma prayer had been made to quash approvals and
E clearances contained in the orders dated 16.9.2009 and
22.9.2009 and to direct the respondent No.7/appellant herein
Mis. Jal Mahal Resorts Private Limited to restore the original
position of 100 acres of land by removing the soil filled in by it
at its own costs.
F
6. The appellant M/s. Jal Mahal Resorts Private Limited
has assailed the judgment and order of the High Court on
several grounds to be related hereinafter. But before doing so
it has related the factual and historical background of the matter
G giving rise to these appeals. In this context, it has been stated
that the Mansagar Lake was a man-made lake on the northern
fringe of Jaipur city. Within the lake a pleasure pavilion called
Jal Mahal was constructed by the erstwhile rulers of Jaipur in
the 18th century and this structure is still existing in the midst
of the lake. Tracing out the historical background, it has been
H
•
JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
777
[GYAN SUDHA MISRA, J.]
stated that in 1962, the two main sewerage drains of the walled
A
city of Jaipur Nagtalai and Brahmapuri were diverted to empty
into the water body which led to its degeneration, siltation and
se.ttled deposits and contaminations to such an extent that it
could not support aquatic life nor support flora and fauna in the
surrounding areas. The water body was covered with floating
B
hycinth and its aquatic life and there were large scale death of
fish that had earlier survived and led to a drastic reduction in
the fauna including the migratory birds that used to flock in the
vicinity of the lake was on the verge of extinction. About 40%
of the catchment area which covered approximately 23.5 c
Sq.Kms was dense urban population. Towards the south side
of the lake, large amounts of unintended developments and
encroachments had taken place thereby drastically increasing
the quantity of effluents discharged into the lake and also put
other pressures by unconditional grazing of cattle and urban 0
development. Jal Mahal had also very substantially deteriorated
over a period of time not only because of natural process of
degeneration but also because of maintenance. The monument
was in a dilapidated state and required massive restoration
works.
7. The deteriorating condition of the Lake and the
Monument compelled the Government to find ways and means
E
to restore the two components to their original glory. Over a
period of 30 years attempts were made by various government
agencies and departments to restore the ecological and
F
environment condition of the lake and its adjoining area.
However, none of these attempts yielded very positive results
because of paucity of resources to take up and sustain the
.restoration.
8. The Government of Rajasthan, therefore. decided to
G
adopt an incentivized approach to restore the Lake and the
Monument and develop the precinct area on a public private
partnership format. To improve the condition of the lake, the
State of Rajasthan, in consultation with experts and after
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[2014] 11 S.C,R.
A detailed surveys and analysis, developed a holistic approach .
involving three components namely (i) restoration ofMansagar·.
Lake, (ii) restoration of Jal Mahal and (iii) development of
tourism/recreational components at the lake precincts. Thus, the
third component visualized development of the precincts area
B of the lake which comprised of about 100 acres of land towards
the south on a sustainable development model. It was, therefore,
required that the lake and Jal Mahal be restored and the lake
precinct be developed for limited eco friendly tourism facilities
which would also provide funds for 0 & M of the lake on a
c continuous basis. The benefits of this project was that it would
result in the restoration of the Mansagar Lake and the Jal Mahal
monument and there would be consequent development of eco
friendly tourism destinations with large open green spaces in
the vicinity of the lake which would improve the environment and
D resultantly, the aesthetics and visual quality of the area.
9. The Government, therefore, adopted the approach of
public-private partnership to the restoration and development
of the precincts in an environmentally conscious way. For this
purpose, project conceptualization was chalked out and the
E project structure was conceptualized after detailed studies over
a number of years. In the year 1999 a Detailed Feasibility
Report ("DFR") was prepared. The DFR covered architectural
conservation and reuse of Jal Mahal; Ecological Restoration
of the Lake along with Development of surrounding areas for
F integrated tourism development and recreational facilities.
Approval to the DFR was accorded by Jaipur Municipal
Corporation in November 2000.
10. As a consequence of the aforesaid conceptualization,
process for bidding started which has been described as First
G Bid Process by the appellant which started after publication of
the advertisement. Request for Qualification ("RFQ") was
released in December, 2000. 6 firms responded and made
submissions for qualification. In the meantime, Request for
Proposal ("RFP") document was prepared by the Project
H
•
• JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
779
[GYAN SUDHA MISRA, J.)
Development Corporation Limited (PDCOR) which is a joint
A
venture company of Government of Rajasthan and IL&FS and
approvals were given by the Government of Rajasthan. Request
for proposal was released and Board of Infrastructure
Development & Investment (BIOi), a high powered committee
of' the Government headed by the Chief ·Minister with an
B
objective to accelerate private investment in industry and
related infrastructure, formed a sub-committee to decide on
fiscal concessions necessary for" the project. The Jaipur
Municipal Corporation was made the nodal agency for project
purposes. However, the first bid process failed as despite c
applying for qualification no bidder ultimately participated in the
bid.
11. The aforesaid failure led to the appraisal and approval
of the project report by the Ministry of Environment and Forests.
The Government of Rajasthan, through Department of Urban
D
Development, sent proposals to Ministry of Environment and
Forest (MoEF), Government of India, on 17.08.2001 seeking
funds for Lake Restoration of the said project under National
Lake Conservation Programme ('NLCP"). MoEF responded
by requesting that details regarding fund requirement, O&M
E
agency, source of funding for O&M along with Detailed Project
Report (DPR) comprising of bankable proposal be submitted.
Hence, On 8th & 9th December, 2001 and thereafter on 26th
& 27th January, 2002, the Project Site was studied by the
representatives of MoEF.
F
12. On 22.1.2002, a letter was written by MoEF wanting
break up of estimated costs as also commitment of State
Government to bear 30% of the cost sharing as well as
identifying agency for carrying out O&M. The State Governm~nt G
was also to ensure that no untreated sewage should be
discharged into Mansagar Lake which could be achieved inter
alia by diverting the two nallahs that discharged waste in the
lake.
13. Based on experts recommendation after complete
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SUPREME COURT REPORTS
[2014) 11 S.C.R.
A technical surveys and environmental studies of the lake, the
area for the project was identified and recommended by
renowned consultants LASA (Lea Associates South Asia
Private Limited) as being ecologically viable. The DPR itself
mentioned that the ecological restoration of the lake would be
B carried out on the basis of which it can ·be sustainable and
bankable as required by MOEF through a Public Private
Partnership model.
14. On the basis of commitment of State Government to
•
C meet 30% expenditure on restoration of Mansagar Lake, MoEF,
Government of India, approved the DPR in October, .2001 under ·
the NLCP with 70% amount as grant in aid. MoEF ~lso
conveyed its appreciation on DPR and observed as follows:
"the project document and structure as developed by
D
PDCOR Limited has served as a benchmark for
developing sustainable Lake restoration projects on a
Public Private Partnership (PPP) model. You will be
pleased to know that we are recommending a similar
approach to other states for Lake Conservation projects".
E
15. This gave rise to the new bidding process which may
be termed as 'Second Bid Process' for which decision was
taken in its 9th meeting held on 10.1.2002, approved further
fiscal concessions necessary for the project and approved a
fresh round of bidding. The nodal agency for the project was
F changed to Jaipur Development Authority ("JOA") from earlier
agency, Jaipur Municipal Corporation. The bid documents were
duly approved and an advertisement inviting Expression of
Interest ("Eol") was issued for selection of Private Sector
Developer ("PSD") in April, 2003 after the key commercial
G terms of the project and even the draft of the advertisement was
approved by JOA. The Empowered Committee of Infrastructure
Development ("ECID"), a high powered committee headed by
Chief Secretary, formerly known as SCIO, directed Secretary,
UDH to finalize key commercial terms for selection of PSD.
H During the first round of bidding the proposed lease was 60
•
JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
781
[GYAN SUDHA MISRA, J.]
years in the aggregate. As that period was considered unviable,
A
in the second round of bidding the period of lease was
proposed as 99 years: Moreover, restoration of Jal Mahal by
the PSD was made optional and not mandatory.
16. In pursuance to the aforesaid steps, detailed RFP were
B
issued to interested private parties which was approved by JOA
and released in July, 2003. The advertisement inviting RFP for
selection of Private Sector Developers ("PSD") was published
in leading newspapers (Rajasthan Patrika and Economic
Times). In addition, PDCOR developed strategy for marketing
and wide publicity of the project by apprising potential
C
entrepreneurs across the globe about the features of the project
with a view to encourage them to come forward to participate
in the bid process. As the tourism project was to generate funds
for sustained O&M measures, the Department of Tourism
("DOT") and later Rajasthan Tourism Development Corporation
D
("RTDC") was made the nodal agency for the project. Four
competitive bids including from the Petitioner were received
which were evaluated and PDCOR submitted its report to
Government of Rajasthan for its approval. The Technical
Evaluation Committee constituted for evaluation of bids
E
comprised of eminent experts like Padamashree Dr. B.V.
Doshi, Architect, Mr. Mohd. Shaheer, Landscape Architect and
Mr. Hemant Murdia, Chief Town Planner, Government of
Rajasthan.
F
17. The petitioner/appellant got the highest marks in
technical evaluation of its bid and when financial bids were
opened the Petitioner's bid was found to be the highest.
Consequently, ECID in its meeting held on 9.2.2004 headed
under the Chairmanship of Chief Secretary decided to grant
the project to the Petitioner. The letter of intent was issued to
G
the Petitioner on 30.9.2004. On 22.11.2005 after approval from
the Government of Rajasthan the Lease in respect of the project
·1and and the Liel:lnse for restoration and reuse of Jal Mahal
were executed.
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(2014] 11 S.C.R.
A
18. In terms of the project an area of 100 acres of land
towards the south of Mansagar Lake was to be leased out for
a period of 99 years for development of eco-friendly tourism
components as set out in the RFP. The entire development, at
the end of 99 years, was to be transferred back to the State
B Government without any compensation payable to the Private
Sector Developer. In terms of the RFP, it was optional for the
Private Sector Developer to undertake the restoration and
reuse of the Jal Mahal Monument. The Petitioner while making
the bid also exercised the option for restoration and reuse of
c the Jalmahal monument. The Petitioner in terms of the license
agreement set out to restore the monument. The RFP
estimated the cost of restoration of Jal Mahal at approximately
Rs.1.50 crores. In reality the cost of restoration of Jal Mahal
worked out to Rs.10 crores. The State Government had also
D constituted an Empowered Committee to oversee the time
bound restoration of Mansagar Lake and Jal Mahal Monument.
19. The Petitioner's/appellant's in pursuance to the lease
appointed consultants who did extensive research plan which
was got approved from the Empowered Committee. Ultimately
E the monument was fully restored under the supervision of
Empowered Committee upon advice of renowned conservation
architect Dr. Kulbhusan Jain and other consultants.
20. The Petitioner/appellant, who had been given the lease
F of 100 acres of land on the southern shore of Mansagar Lake,
after obtaining all necessary approvals, had completed Phase1 of the Project. But the project suffered a grave set back and
knee jerk obstruction as by this time i.e. in the year 2010 public
interest petitions were filed in the High Court although the
G petitioner had already started executing the project and had
"'!ready spent an amount of Rs.38 crores besides paying more
than 14 crores as project development fees and lease rent to
RTDC as per the petitioner/appellant's case in terms of the
lease deed. In pursuance to the same, the restoration of the
Mansagar Lake under the DPR prepared by PDCOR was to
H
•
• JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
783
[GYAN SUDHA MISRA, J.]
be undertaken by the State Government. The O&M work was
A
to be carried out from lease rentals received from Private
Sector Developer i.e. the Petitioner. The total amount
sanctioned for restoration of the lake by the Central Government
and the State Government was Rs.24.72 crores. This amount
proved to be inadequate and the Government due to further
B
resource crunch was not in a position to spend any further
amount. Resultantly, the restoration of the lake, which was the
cornerstone of the project, was in danger. The Petitioner spent
over Rs.15 crores on restoration of the lake with the approval
of the Empowered Committee.
c
21. As a measure of restoration and development of the
project, the entire project implementation had to be done so
as to achieve sustainable eco preservation and development.
The Petitioner, therefore, acted under the advise and on the
recommendation of experts. These activities were further
D
monitored by the Government of Rajasthan and its agencies.
The petitioner/appellant stated that for the purpose of
restoration, the Petitioner engaged a number of nationally and
internationally renowned consultants including Mr. Soli J.
Arceivala, Ex. Director of NEER!, Dr. Shyam R. Asolekar from
E
llT Mumbai, Dr. G.C. Mishra from llT Roorkee, Mr. Jal R.
Kapadia Environment Consultant, Mumbai and Mr. Herald
Craft, renowned lake expert from Germany. Some of these
experts had also worked for restoration of the Hussain Sagar
Lake in Hyderabad. The State Government had also constituted
F
an Empowered Committee to oversee the time bound
restoration of Lake. The work involved realignment of the
Nagtalai and Brahmpuri drains so that domestic sewage and
waste including run-off and detritus during the monsoons no
longer emptied into the cleansed waters as also desilting of the
G
water body which were essential components of DPR as
approved by MoEF under NLCP. In order to ensure that the
ongoing discharge of drainage did not once again pollute the
water, Mr. Herald Craft the German Lake Conservation expert
prepared a report which suggested preparing temporary
H
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SUPREME COURT REPORTS
[2014] 11 S.C.R.
A sedimentation/settling tanks near the mouth I discharge point
of the re-aligned drains. The purpose of constructing of
sedimentation tank was to trap the silt and organic content of
the storm water so that the quality of water in the whole of water
body is not adversely affected. The sedimentation process
B were also reviewed by a team of experts from MoEF Which
found the system as a viable and proper solution: It has been
further brought to the notice of this Court that the project fell
within item 8(a) of Environmental notification dated 14.09.2006
and was also confirmed by MoEF in its Affidavit in Reply filed
c to the. writ petition and a detailed Environmental Impact
Assessment ("EIA") was carried out by State Level Environment
Impact Assessment Authority ("SEIAA") constituted by MoEF.
It is, therefore, stated that all requisite environmental approvals
were obtained.
D
22. The project thereafter was started and the land leased
to the Petitioner, according to the appellant, was not a part of
the water body in the first Master Plan 1971-1991 for Jaipur
and an area of 200 acres around the south side of Jal Mahal
was demarcated and reserved for tourist facilities. The land
E leased to the Petitioner was a part of this land area reserved
for tourist facilities. The said land continued to be retained for
tourism and recreational activities in the subsequent city master
plans including the master plan of 2011 and 2025.
F
23. The appellant has further stated that the Man Sagar
Lake on its western side is bound by Jaipur-Amer road. The
level of the road is at a contour level of 100 MRL. The ground
floor of the Jal Mahal monument within the lake is at the contour
level of 98.2 MRL. PDCOR, based on intensive studies, found
G this level as the most appropriate level taking into account the
fact that the lake was not freshened by natural acquifers but was
dependent on surface runoff during the monsoons, and to
ensure that ground floor of Jal Mahal was not submerged.
24. However, the contesting respondents herein who were
H the PIL petitioners befqre the High Court, averred that the PIL
•
• JAL MAHAL RESORTS P. LTD. v. K.P. SHARMA
785
[GYAN SUDHA MISRA, J.]
petitioner Prof. K.P. Sharma is involved in the research with
A
regard to Man Sagar Lake and has published a paper which
was read out in the 12th World Lake Forests TAAL 2007. It was
·submitted by learned counsel Mr.