# SRI RAM BUILDERS v. STATE OF M.P. & ORS

- **Citation:** [2014] 5 S.C.R. 686
- **Court:** Supreme Court of India
- **Decided:** 2014-04-25
- **Case number:** Civil Appeal No. 4896 of 2014
- **Bench:** Surinder Singh Nijjar, A.K. Sikri
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sri-ram-builders-v-state-of-m-p-ors-30115
- **Pages:** 38

## Headnote

Judgments:
c
Rule of merger - Held: SLP having been dismissed in
limine without recording any reason, judgment of High Court
cannot be said to have merged with order of Supreme Court.
Administrative Law:
D
Public authority - Chief Secretary of State directed by
1
High Court to settle issue of cancellation of lease in favour
of MPRTC - Appellant submitted representation before Chief
Secretary -
Held: Appellant having not challenged
competence of Chief Secretary to decide the issue, cannot
E be permitted to say that directions issued by Chief Secretary
are without jurisdiction.
Constitution of India, 1950:
Art. 226 - Writ petition for enforcement of contract with
F
instrumentality of State - Contract between appellant and
MPRTC to construct a bus stand-cum-commercial complex
on land leased to MPRTC by /DA - Held: Scope of judicial
review is very limited in contractual matters even where one
of the contracting parties is the State or an instrumentality of
G
the State - High Court has rightly observed that appellant can
seek appropriate relief by way of a civil suit - High Court in
exercise of its jurisdiction under Art. 226 would not normally
grant relief of specific performance of a contract.
H
686
SRI RAM BUILDERS v. STATE OF M.P.
687
Contract:
Contract between appellant and MPRTC to construct a
bus stand-cum-commercial complex on land leased to
MPRTC byJDA - Held: At no stage, appellant had any privity
A
of contract with /DA - MPRTC entered into a BOT contract
8
with appellant contrary to the terms and conditions of lease
which provided specifically that land shall be used only for
bus stand - MPRTC had no regal right to create any further
right in favour of appellant with regard to receiving of premium
on constructed units sold to third party(ies) - Even otherwise,
C
by efflux of time the said /ease period expired on 21.1.2012
-
So far as the breach of contract is concerned, appellant
will have no cause of action against /DA as there is no privity
of contract between the parties - Appellant shall be at liberty
·to seek its remedies against MPRTC for breach of contract -
"
So far as the specific performance is concerned, the entire
D
purpose of the contract has been frustrated by subsequent
events.
Subsequent Events:
Contract between appellant and MPRTC to construct a
bus stand-cum-commercial complex on land leased to
MPRTC by /DA - Subsequently lease in favour of MPRTC
expired - Possesson of land delivered to /DA -
Held:
MPRTC would not be in a position to continue with the lease
as it is heavily indebted - Property of the Corporation has
been attached by various creditors - Even the proposed site
where the bus stand-cum-commercial complex was to be
constructed is under attachment.
E
F
A lease deed dated 2-11-1981 was entered into G
between Madhya Pradesh Road Transport Corporation
(MPRTC) and Indore Development Authority (IDA).
Possession of the land was handed over to MPRTC on
22-1-1982. Initially, the lease was taken by the MPRTC for
the purpose of a bus stand. On 8-11- 2001, the Council
H
688
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A of Ministers of the State authorized construction of a
commercial complex on the land under build, operate and
trade (BOT) Scheme. A tender notice was issued on
13.4.2002. The bid of the appellant was found to be the
highest. An agreement was entered into between MPRTC
8 and the appellant on 4.2.2004 whereunder the promoters/
builders had the right to market the saleable space in the
commercial complex and collect premium on such
allotment from prospective buyers. On 25.5.2004, MPRTC
deposited the lease rental with IDA. A formal lease was
c executed on 26-5-2004, for 30 years. The leased land
(plot) was to be used only for the bus terminal. It was
specifically provided that the plot could not be divided.
On 18.12.2005, the State Government decided to wind up
the MPRTC. However, the proposal of the State
0 Government was not approved by the Ministry of
Shipping and Road Transport, Government of

## Text

_Characters 0–39,817 of 72,139. This is a partial read: ask again with offset=39817 for what follows._

A
B
[2014] 5 S.C.R. 686
SRI RAM BUILDERS
v.
STATE OF M.P. & ORS.
(Civil Appeal No. 4896 of 2014)
APRIL 25, 2014.
[SURINDER SINGH NIJJAR AND A.K. SIKRI, JJ.]
Judgments:
c
Rule of merger - Held: SLP having been dismissed in
limine without recording any reason, judgment of High Court
cannot be said to have merged with order of Supreme Court.
Administrative Law:
D
Public authority - Chief Secretary of State directed by
1
High Court to settle issue of cancellation of lease in favour
of MPRTC - Appellant submitted representation before Chief
Secretary -
Held: Appellant having not challenged
competence of Chief Secretary to decide the issue, cannot
E be permitted to say that directions issued by Chief Secretary
are without jurisdiction.
Constitution of India, 1950:
Art. 226 - Writ petition for enforcement of contract with
F
instrumentality of State - Contract between appellant and
MPRTC to construct a bus stand-cum-commercial complex
on land leased to MPRTC by /DA - Held: Scope of judicial
review is very limited in contractual matters even where one
of the contracting parties is the State or an instrumentality of
G
the State - High Court has rightly observed that appellant can
seek appropriate relief by way of a civil suit - High Court in
exercise of its jurisdiction under Art. 226 would not normally
grant relief of specific performance of a contract.
H
686
SRI RAM BUILDERS v. STATE OF M.P.
687
Contract:
Contract between appellant and MPRTC to construct a
bus stand-cum-commercial complex on land leased to
MPRTC byJDA - Held: At no stage, appellant had any privity
A
of contract with /DA - MPRTC entered into a BOT contract
8
with appellant contrary to the terms and conditions of lease
which provided specifically that land shall be used only for
bus stand - MPRTC had no regal right to create any further
right in favour of appellant with regard to receiving of premium
on constructed units sold to third party(ies) - Even otherwise,
C
by efflux of time the said /ease period expired on 21.1.2012
-
So far as the breach of contract is concerned, appellant
will have no cause of action against /DA as there is no privity
of contract between the parties - Appellant shall be at liberty
·to seek its remedies against MPRTC for breach of contract -
"
So far as the specific performance is concerned, the entire
D
purpose of the contract has been frustrated by subsequent
events.
Subsequent Events:
Contract between appellant and MPRTC to construct a
bus stand-cum-commercial complex on land leased to
MPRTC by /DA - Subsequently lease in favour of MPRTC
expired - Possesson of land delivered to /DA -
Held:
MPRTC would not be in a position to continue with the lease
as it is heavily indebted - Property of the Corporation has
been attached by various creditors - Even the proposed site
where the bus stand-cum-commercial complex was to be
constructed is under attachment.
E
F
A lease deed dated 2-11-1981 was entered into G
between Madhya Pradesh Road Transport Corporation
(MPRTC) and Indore Development Authority (IDA).
Possession of the land was handed over to MPRTC on
22-1-1982. Initially, the lease was taken by the MPRTC for
the purpose of a bus stand. On 8-11- 2001, the Council
H
688
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A of Ministers of the State authorized construction of a
commercial complex on the land under build, operate and
trade (BOT) Scheme. A tender notice was issued on
13.4.2002. The bid of the appellant was found to be the
highest. An agreement was entered into between MPRTC
8 and the appellant on 4.2.2004 whereunder the promoters/
builders had the right to market the saleable space in the
commercial complex and collect premium on such
allotment from prospective buyers. On 25.5.2004, MPRTC
deposited the lease rental with IDA. A formal lease was
c executed on 26-5-2004, for 30 years. The leased land
(plot) was to be used only for the bus terminal. It was
specifically provided that the plot could not be divided.
On 18.12.2005, the State Government decided to wind up
the MPRTC. However, the proposal of the State
0 Government was not approved by the Ministry of
Shipping and Road Transport, Government of India and
the State Government was informed of the decision by
letter dated 17.11.2008. Meanwhile, when the State
Government intended to close down MPRTC, the
appellant filed W.P. No. 63 of 2005. On 5.8.2005, the High
E Court issued direction in the said writ petition, inter alia,
that the respondent would hand over vacant possession
of the premises in question to the appellant. The SLP filed
against the directions was dismissed by the Supreme
Court. On 2.11.2007, the lease was cancelled by IDA. The
F cancellation of the lease was challenged by MPRTC, by
way of a writ petition, which was disposed of by the High
Court on 11.12.2007 by referring the entire issue to the
Chief Secretary. The appellant did not challenge the order
dated 2.11.2007. It submitted to the jurisdiction of the
G Chief Secretary by filing a comprehensi~.
e representation.
The Chief Secretary, on 4.3.2009 de 'ded the matter
holding: (I) Order dated 2.11.2007,an . notice dated
3.6.2007 for cancellation of lease be cancelled; (II) RTO
be ordered to release the land in question for attachment;
H (Ill) .MPRTC would hand over possession of land in
SRI RAM BUILDERS v. STATE OF M.P.
689
question to IDA; (IV) The amount received from appellant
A
be returned with interest; and (V) Decision as to use of
land would be taken by IDA. The appellant challenged
directions Ill, IV and V of the Chief Secretary in the writ
petition before the High Court, which declined to interfere.
Dismissing the appeals, the Court
HELD: 1.1. The dismissal of the SLP filed by MPRTC
against the order dated 5.8. 2005 in Writ Petition No.363
B
of 2005 was a dismissal in limine without recording any
reason. Therefore, the judgment of the High Court cannot C
be said to have merged with the order of this Court. [para
47) [714-D]
Indian Oil Corporation Ltd. vs. State of Bihar & Ors. 1986
(3) SCR 553 = 1986 (4) SCC 146; Kunhayammed & Ors. vs.
D
State of Kera/a & Anr. 2000 (1) Suppl. SCR 538 = 2000
(6) SCC 359; and Gangadhara Palo vs. Revenue Divisional
Officer & Anr. 2011 (3) SCR 7 46 = 2011 (4) SCC 602 "."" relied
on.
1.2. Even otherwise, the events after the passing of E
the order dated 5.8.2005 cannot be ignored. The lease to
MPRTC was cancelled on 2.11.2007 by the IDA, which
was not challenged by the appellant. The said order was
challenged by MPRTC in Writ Petition No.6770 of 2007.
On 11.12. 2007, the High Court without issuing notice to
F
the appellant, who was impleaded as respondent No.3,
disposed of the writ petition. The High Court noticed that
two instrumentalities of the State have chosen to bring
their disputes in open court. In such circumstances, the
High Court was of the opinion that the entire dispute G
ought to be decided by the Chief Secretary of the State
of Madhya Pradesh by holding meetings with the officers
of th~ respective departments. The appellant submitted
a detailed representation dated 20.2.2009 before the Chief
Secretary, who revoked the order dated 2.11.2007 and
H
690
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A notice dated 30.6.2007. R.T.O. was directed to release the
leased land from attachment. It is noteworthy that the
appellant has not chosen to challenge the said two
directions. However, the appellant challenged in the writ
petition the directions issued in Clauses Ill, IV and V, but
B did not challenge the competence of the Chief Secretary
to decide the issues. The appellant cannot be permitted
to state that the said directions are without jurisdiction.
Under the orders dated 4.3.2009 of the Chief Secretary,
possession of the land has already been delivered to IDA.
c Therefore, it would not be possible at this stage to direct
that the mandamus granted on 5.8.2005 in Writ Petition
No.636 of 2005 shall be enforced. Further, having
submitted to the jurisdiction of the Chief Secretary, it
would not be open to the appellant to challenge the order
0 dated 11.12. 2007. [para 50 and 60] [716-F-H-; 717-A-G;
723-F-G]
1.3. In the ultimate analysis, the whole controversy
boils down to a breach of contract by MPRTC entered
into with the appellant. The scope of judicial review is very
E limited in contractual matters even where one of the
contracting parties is the State or an instrumentality of
the State. [para 51] [717-G-H]
Tata Cellular vs. Union of India 1994 (2) Suppl. SCR
F 122 = (1994) 6 SCC 651 - referred to.
1.4. The High Court has rightly observed that the·
appellant can seek the appropriate relief by way of a civil·
suit. The High Court in exercise of its jurisdiction under
Art. 226 of the Constitution would not normally grant the
G relief of specific performance of a contract.[para 52l [719F-GJ
Ramchandra
Murarilal
Bhattad
vs.
State
of
Maharashtra 2006
(10) Suppl.
SCR 106
= 2007
H
SRI RAM BUILDERS v. STATE OF M.P.
691
(2) SCC 588; Noble Resources Limited vs. State of Orissa
A
2006 (6) Suppl. SCR 53 = 2006 (1 O) sec 236 - relied on
1.5. At no stage, the appellant had any privity of
contract with IDA. MPRTC entered into a BOT contract
with the appellant contrary to the terms and conditions
of the lease which provided specifically that the land shall
be used only for bus stand. MPRTC had no legal right to
create any further right in favour of the appellant with
regard to the receiving of the premium on the constructed
units sold to third party(ies). [para 53] [720-C-D]
1.6. Even otherwise, the possession of the proposed
site was delivered to MPRTC on 22.1.1982. The maximum
lease period was for 30 years. By efflux of time the said
lease period expired on 21.1.2012. It cannot be said that
8
c
as the entire rent had been paid, MPRTC would be o
entitled to automatic renewal of the lease for 90 years.
The renewal clause in the lease provides that the renewal
shall be with the consent of IDA. This consent by the IDA
is not a mere formality. Therefore, it cannot be accepted
that the term of the lease has to be understood to have
E
commenced from 26.05.2004. [para 53] [720-D-F]
1. 7. Besides, no application has been filed even for
formal renewal by MPRTC. In any event, MPRTC would
not be in a position to continue with the lease as it is
heavily indebted. The property of the Corporation has
been attached by various creditors. Even the proposed
site where the bus stand-cum-commercial complex was
_to. be constructed is under attachment. The claim made
by the appellant is in the nature of damages for breach
F
of contract and/or the relief of specific performance of G
contract. So far as the breach of contract is concerned,
the appellant will have no cause of action against IDA as
there is no privity of contract between the parties. The
appellant shall be at liberty to seek its remedies against
MPRTC for breach of contract. As regards the specific
H
692
SUPREME COURT REPORTS
[2014] 5 S.C.R. ·
A performance, the entire purpose of the contract has been
frustrated by subsequent events. The lease has come to
an end by efflux of time. This apart, MPRTC is heavily
indebted and had sought permission of the State and the
Union of India to wind up. Furthermore, there was also a
8 breach of the terms and conditions of the lease on the
basis of which it has been terminated in accordance with·
law. [para 54 and 58] [720-G-H; 721-A-B; 722-H; 723-A]
Maritime National Fish, Limited vs. Ocean Trawlers,
Limited (1935) A.C. 524; Boothlinga Agencies vs. V. T.C.
C Poriaswami Nadar (1969) 1 SCR 65 - held inapplicable.
Pollock and Mui/a, 14th Ed.Pgs. 887-889 - referred to.
1.8. In any event, these are issues which would involve
adjudication of disputed questions of fact which can only
D be suitably adjudicated in the civil suit as directed by the
High Court in the impugned judgment. The appellant shall
be at liberty to seek its remedies against MPRTC for breach
of contract. [para 59] [723-8-C]
E
Rajasthan Housing Board & Anr. vs. G. S. Investments
& Anr. 2006 (7) Suppl. SCR 868 = 2007 (1) SCC 477 - relied
on.
Meghmala & Ors. Vs. G. Narasimha Reddy & Ors. 2010
F (10) SCR 47 = 2010 (8) SCC 383; DOA vs. Durga Chand
Kaushish
1974
(1) SCR 535 =1973
(~) SCC 825;
Ramkishore Lal vs. Kamal Narian (1963) Supp (2) SCR 417
and Sahebzada Mohammad Kamgar Shah vs. Jagdish
Chandra Deo Dabhal Deo (1960) 3 SCR 604; Provash
Chandra Dalui vs.
Biswanath Banerjee 1989 (2)
G SCR 401 =1989 (1) Suppl. SCC 487; and State of U.P. vs.
Lalji Tandon2003 (5) Suppl. SCR 77 = 2004 (1) SCC 1;
Hardesh Ores (P) Ltd. Vs. Hede and Company 2007 (6)
scR 608 = 2001 (5) sec 614 - cited.
SRI RAM BUILDERS v. STATE OF M.P.
693
Case· Law Reference:
2010 (10) SCR 47
cited
para 30
1974 (1) SCR 535
cited
para 32
(1963) Supp (2) SCR 417
cited
para 32
(1960) 3 SCR 604
cited
para 32
1989 (2) SCR 401
cited·
para 33
2003 (5) Suppl. SCR 77.
cited
para 33
1969) 1 SCR 65
held
para 35
inapplicable
2006(7) Suppl. SCR 868
relied on
para 39
2007 (6) SCR 608
cited
para 41
2000 (1) Suppl. SCR 538
relied on
para 41
2011 (3) SCR 7 46
relied on
para 41
1986 (3) SCR 553
relied on
para 47
1994 (2) Suppl. SCR 122 referred to
para 51
2006 (10) Suppl. SCR 106 relied on
para 52
2006 (6) Suppl. SCR 53
relied on
para 52
(1935) A.C. 524.
Held
para_56
inapplicable
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4896 of 2014.
From the Judgment & Order dated 27.09.2012 of the High
Court of M.P. at Jabalpur in W.P. No. 2937 of 2009.
WITH
C.!~. Nos. 4897, 4898-4899, 4900 of 2014.
R.F. Nariman, P.S. Patwalia, Sushil Kr. Jain, Puneet Jain,
.Christi Jain, Chhaya Kirti, Pratibha Jain for the Appellant.
A
B
c
D
E
F
G
H
A
B
694
SUPREME COURT .REPORTS
[2014] 5 S.C.R.
Dushyant Dave, J.P. Cama, Krishnan Venugopal, Sanjay
Kapur, Anmol Chandan, Priyanka Das, Lekha Vishwanath,
Ashish Wad, Jayashree Wad, Tamali Wad, Kanika Baweja (for
_J.S. Wad & Co.), Mishra Saurabh, V. Shukla, Ankit Lal for the
Respondents.
The Judgment of the <?ourt was delivered by
SURINDER SINGH NIJJAR, J. 1. Leave granted.
2. The Civil Appeal 4896 of 2014 arising out of S.L.P. (C}
No. 35001 of 2012 impugning the judgment of the M.P. High
C Court at Jabalpur rendered in Writ Petition No. 2937 of 2009.
The Writ Petition has been disposed of along with Review
Application MCC No. 99 of 2009 and MCC No. 893 of 2008
as well as Contempt Petition No. 469 of 2008. The writ petition
has been disposed of with certain directions. Whereas the
D aforesaid Contempt Petition and the two Review Petitions have
been disposed of in view of the order p·assed in Writ Petition
No. 2937 of 2009.
3. The relevant facts leading to the filing of the aforesaid
E SLP are as follows:-
4. In 1979, Respondent No.2 I Madhya Pradesh Road
Transport Corporation (hereinafter referred to as "MPRTC")
proposed to construct a bus stand at Vijay Nagar, Indore. To
F this end, an Agreement for Lease dated 2nd November, 1981
was entered into between the Transport Corporation and
Respondent No.5/ Indore Development Authority (hereinafter
referred to as "IDA"), by which the land belonging to IDA,
admeasuring 10 acres situated at Vijay Nagar, Indore
(hereinafter referred to as "proposed site") was agreed to be
G allotted to the Transport Corporation, initially, for 30 years. In
pursuance of the Lease Agreement, pos~ession of the
proposed site was handed over to the MPRTC.
·
5. The Council of Ministers, State of Madhya Pradesh, vide
H order dated 8th November, 2001, authorised the Transport
·SRI RAM BUILDERS v. STATE OF M.P.
695
[SURINDER SINGH NIJJAR, J.]
Corporation to construct a commercial complex on the land
A
owned by it or allotted to it on lease, under a Build, OwnOperate and Transfer ("BOT") Scheme through open tenders.
The revenue generated from the said project(s) was to be used
to discharge the liability of the MPRTC. On 13th April, 2003, a
notice inviting bids for selection of a developer under the BOT
B
Scheme was issued and published in the leading newspapers.
In response to this notice, a total number of ten applications
were received; and out of those ten applications, five were
found to have satisfied the eligibility criteria. Appellant was
placed at Sr. No.1 in the list of the candidates satisfying the c
eligibility criteria. Thereafter, a Special Committee was
constituted for the scrutiny of tenders received for construction
of the bus stand/commercial premises under the B.O.T.
Scheme. On 3rd July, 2003, the Special Committee
recommended that since the premium amount offered by the
0
bidders was less, further negotiations be held with all the
qualified bidders. Accordingly, the Special Committee held
negotiations with the qualified bidders on 7th July, 2003,
wherein the Appellant's bid for the B.O.T. Scheme was found
to be the highest.
E
6. MPRTC, after scrutiny of the financial bid and the
proposal submitted by the Appellant for B.O.T. scheme,
approved its bid vide Acceptance Letter dated 3rd October,
2003. In the Acceptance Letter, the Appellant was directed to
deposit 25 per cent amount of the total premium amount of
F
Rupees One Crore Sixteen Lac Thirty Seven Thousand Seven
Hundred and Fifty (Rs.1,16,37,750/-) within 15 days of the
issuance of the Acceptance Letter. Accordingly, Appellant
deposited the first installment of Rs.1, 16,37 ,750/-. The appellant
also have to pay a further sum of Rs.7,33,320/- demanded by G
MPRTC as consultancy fees.
7. In pursuance of the Acceptance Letter, an Agreement
dated 4th February, 2004 was entered into between the
Appellant and the MPRTC. This agreement inter alia provided
H
696
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A that the tender document with scope of work general conditions,
special conditions, general specifications, list of brands and
offer price bid shall form part of the agreement.
8. The MPRTC issued a work order dated 16th March,
B 2004 to the Appellant for demolishing the existing structure on
the land; to be replaced by the commercial complex. On 11th
May, 2004, the State Government issued a notification, in
exercise of powers under Sections 35(2) and 35(3) of the
Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973
(hereinafter referred to as "Adhiniyam"), by which out of 10
C acres of land at Vijay Nagar which had been earmarked for the
bus stand (proposed site), 3:59 acres of land was permitted
to be used for commercial purposes.
9. On 14th May, 2004, the Appellant requested the
D MPRTC to hand over the possession of the proposed site, so
that the structure existing thereon could be demolished and new
bus stand-cum-commercial complex could be constructed, in
accordance with the terms and conditions of the tender/
agreement.
E
10. On 27TH May, 2004, a lease deed was executed in
favour of MPRTC by the IDA upon payment of Rs. 24,27,052/
- by the Appellant. This payment was made by the Appellant in.
order to let the Transport Corporation pay its arrears to IDA.:
Subsequently on 24th June, 2004, IDA gave a No Objection.
F Certificate ("NOC") to the MPRTC for the proposed BOT:
project. Also, the Deputy Director, Town and Country Planning
granted approval to the MPRTC for the construction of the Bus.
Stand and Commercial _Complex.
G
11. On 28th June, 2004, Writ Petition No. 801 of 2004
came to be filed by one Suresh Seth, before the Indore Bench
of the High Court of Madhya Pradesh, assailing the Notification
dated 11th May, 2004. By this notification, as observed earlier,
reservation of land use of 3.59 acres was changed by the State
\H
Government. The High Court, vide order dated 9th September,
SRI RAM BUILDERS v. STATE OF M.P.
697
[SURINDER SINGH NIJJAR, J.]
2004, sought reports from the State Government as well as the
A
MPRTC and IDA. In their respective reports, the State
Government, MPRTC and IDA stated that the said BOT project
was in public interest and justified the Notification dated 11th
May, 2004.
12. Meanwhile on 6th January, 2005, the Joint Director,
Town and Country Planning sanctioned the detailed site plan
of proposed BOT project. The Appellant also applied the
Municipal Corporation, Indore for sanction of the building plan,
B
but the same was not granted on the ground that Writ Petition C
No. 801 of 2004 was pending before the High Court.
13. On 23rd February, 2005, IDA issued a certificate
indicating therein that in respect of the proposed B.O.T. Project,
premium as well as 15 years' lease rent had already been
deposited. On the basis of the above, the IDA indicated that D
there shall be no objection, if land in question is mortgaged with
any bank, financial institution or the Government.
14. In the meanwhile, there was a move by the State
Government for closure of the MPRTC. In this context, the
E
Government of India granted no objection to the State
Government on 23rd March, 2005, subject to the condition that
the State Government shall ensure and be fully responsible for
ensuring compliance of C!ny existing/future order(s) passed by
various Courts, including Tribunals, in any/all matters relating to
F
MPRTC.
15. The Appellant filed Writ Petition No. 636 of 2005 in the
High Court seeking a direction to the MPRTC to immediately
hand over possession of the land in question to the Appellant
and grant permission to demolish the existing structure. On 5th
G
August, 2005, the Writ Petition No. 636 of 2005 was disposed
of by the High Court with the following directions:
i.
"That petitioner shall deposit the entire balance
amount within a period of one month alongwith
H
A
B
c
D
E
F
698
SUPREME COURT REPORTS
[2014] 5 S.C.R.
interest@ 18% per annum, w.e.f. July 2004 when
the 2r:d installment became due
ii.
Upon depositing entire amount the respondent shall
handover the vacant possession to the petitioner,
within two weeks, with a ,permission, to demolish
the structure as per the agreement. Respondent
shall also pursue the matter with the Municipal
Corporation to handover all part of the premises,
which is in their occupation.
iii.
Respond1;mt shall deposit the map for sanction
before the competent authorities immediately, if not
submitted, so far. In case the map has already been
submitted the respondent shall give the authority to
the petitioner, to pursue the matter before the
competent authorities for obtaining the permission
and shall extend all the assistance for the purpose
of obtaining permission.
iv.
After taking possession, the petitioner shall
construct and hand over the construction property
to the respondent as per terms of the tender notice/
agreement.
v.
The competent authorities shall consider the
application of the respondent for permission and
shall grant the permission in accordance with law."
The Appellant deposited Rs.2,95,03,752/- towards
premium and a further sum of Rs.27,53,536/- towards interest
to the MPRTC, in terms of the aforesaid order. Thereafter,
G again, the Appellant requested the Respondents herein to hand
over the possession of the proposed site to the appellant. A
Notice was issued by the appellant to the MPRTC dated 12th
September, 2005, requesting to hand over possession of the
'
land, in terms of the directions of the High Court dated 5th
H August, 2005.
SRI RAM BUILDERS v. STATE OF l'y1.P.
699
[SURINDER SINGH NIJJAR, J.]
16. At that stage, the Principal Secretary, Transport
A
Department/Respondent No. 2 herein, recorded a note dated
15th September, 2005, questioning the justification for
constructing bus stand and observed that the construction was
not in public interest particularly when a decision had been
taken by the State Government to wind up the MPRTC. Soon
B
thereafter, the MPRTC filed Special Leave Petition No. 20038
of 2005 before this Court challenging the order dated 5th
August, 2005 passed by the High Court. This SLP was
dismissed by this Court vide order dated 7th October, 2005.
17. Possession of the proposed site still not having been
C
delivered, the Appellant filed Contempt Petition No. 466 of 2005
(renumbered as Contempt Petition No. 469 of 2008) before the
High Court of Madhya Pradesh. In this Contempt Petition, the
Appellant moved an application for injunction on 11th November,
2005 (I.A. No. 1060 of 2005) restraining the MPRTC from
D
handing over the possession of the proposed site to the State
Government for establishing the Regional Transport Office. The
High Court on 14th November, 2005, directed MPRTC to
maintain status quo and not to handover the possession of the
proposed site or to create any 3rd party interest. In spite of the
E
aforesaid order, the possession of the proposed site was
handed over by the· MPRTC to the Transport Department on
16th November, 2005, for opening the R.T.O. A test centre for
driving licences has been established on the land meant for the
commercial complex.
F
18. In the meantime, State of Madhya Pradesh moved an
application, MCC No. 1072 of 2005, before the High Court,
seeking recall of the order dated 5th August, 2005 passed in
Writ Petition No. 636 of 2005. The MPRTC also filed MCC No.
G
5 of 2006, seeking identical relief, i.e. recall of order dated 5th
August, 2005. It was claimed that a decision had been taken
by the M.P. State Government to wind up MPRTC. On 23rd
March, 2005, MPRTC had been issued a notice of demand for
recovery of Rs.2387/- crores as Tax dues. The property
H
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SUPREME COURT REPORTS
[2014] 5 S.C.R.
A earmarked for the commercial complex, was onP. of the
properties seized by the State Authorities on 19th July, 2005.
Since the possession was already taken by the State, no
direction for delivery of possession to the Appellant could have
been iss.ued on 5th August, 2005. These facts could not be
s placed before the High Court, as the State was not impleaded
as a party in Writ Petition No. 636 of 2005.
19. Thereafter, Appellant moved I.A. No. 7064 of 2006 in
the Contempt Petition before the High Court to implead the
Transport Department - Respondent No. 2 herein, as a
C respondent in the Contempt Petition. This I.A. was allowed by
the High Court by order dated 6th October, 2006. During the
course of hearing of this Contempt Petition, Appellant moved
another I.A. No. 6906 of 2007, seeking a direction to the
D
E
F
respondents to place on record the following:
"1 (a) On what date and which inward number the order of
the government directing the RTO, Indore to attach the
MPSRTC Property at Indore was received by RTO, Indore
pursuant to which the so called attachment dated 9.7.2005
was made.
1 (b) On what date, by which letter number and under what
dispatch number the fact of attachment and acquisition of
property/land was sent by RTO, Indore to the State
Government (Original Letters, original dispatch register).
And on what date, by which the inward number this
information was received."
According to the Appellant, the respondents could not
furnish the said information to the Court, despite having sought
G a number of opportunities in that regard.
~·
20. Meanwhile on 2nd November, 2007, the IDA cancelled
the lease of the MPRTC for violation of the lease terms by
running the RTO. Cancellation of the lease was challenged by
H the MPRTC through Writ Petition No. 6770 of 2007 in the High
SRI RAM BUILDERS v.-STATE OF M.P.
701
[SURINDER SINGH NIJJAR, J.]
Court of Madhya Pradesh. On 11th December, 2007, the High
A
Court without issuing notice to the Appellant, who was
impleaded as Respondent No.3, disposed of the Writ Petition
with the following observations:-
"When two instrumentalities of the State, such as in the
present case, choose to bring their disputes in open court,
the loss is of the general public. The public confidence in
the credibility of the State Govt. and its various wings/
functionaries and its instrumentalities comes at stake.
B
In these circumstances, I do not find that this Court should
C
continue with the proceedings in the present Petition. l
deem it appropriate to request the Chief Secretary, State
of Madhya Pradesh. to take up the matter at his level and
after holding a meeting with the Principal Secretary,
Transport Department. Principal Secretary, Housing and
D
Environment Department and the Managing Director of the
M.P. Road Transport Corporation Ltd. take such further
action. as may be deemed appropriate. in the facts and
circumstances of the case. However, the Chief Secretary
shall ensure that the officers of the State Government and
E
various other instrumentalities of the State Government are
not allowed to bring out their inter se disputes in public in
future".
21. On 17th November, 2008, the Central Government,
Department of Transport & Highways informed the State
Government of Madhya Pradesh that the request for permission
F
for closure of MPRTC under the provisions of the Road
Transport Corporation Act, for which earlier no-objection had
been given, was being declined keeping in view the decision
of Ministry of Labour & Employment, and that it would now have
G
to continue its current operations.
22. The Appellant submitted representation dated 20th
February, 2009, wherein attention of the Chief Secretary was
drawn to the pendency of the review petitions filed by the State
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SUPREME COURT REPORTS
[2014] 5 S.C.R.
A of Madhya Pradesh and the MPRTC; and the Contempt
Petition filed by the Appellant and the order passed therein,
whereby status quo was ordered to be maintained.
23. In spite of the aforesaid representation, Respondent
B No. 1 held the meeting on 4th March, 2009 as directed by the
High Court, wherein it was inter alia decided as under:
"I.
Order dated 02.11.2007 and notice dated
30.06.07 for cancellation of lease of the land in
question of the Transport Corporation by the l.D.A.
C
be cancelled.
D
E
II.
R.T.O. be ordered for releasing the land by the
Transport Department for attachment.
Ill.
The M.P. Road Transport Corporation shall
hand over land in question to l.D.A.
IV.
The amount which has been received by the .
Transport Corporation from Sh. Ram Builders shall
be returned along with interest to Sh. Ram Builder.
V.
Decision with respect to further use and
management of the land shall be taken by l.D.A."
24. Aggrieved by Clause (Ill}, (IV) and (V) of the aforesaid
decision, Appellant preferred Writ Petition No. 2937 of 2009
F before the High Court of Madhya Pradesh. It was inter alia
contended that the directions in aforesaid clauses were in
violation of order dated 5th August, 2005 of the High Court and
in violation of the principles of natural justice.
G
H
25. The High Court disposed of the Writ Petition on 27th
September, 2012 with the following observations:-
"15. The order dated 5.8.2005 passed in Writ Petition No.
636/2005 directing the corporation to deliver possession .
of site to the petitioner cannot be implemented after the
SRI RAM BUILDERS v. STATE OF M.P.
703
[SURINDER SINGH NIJJAR, J.)
lease deed was cancelled by the IDA. It is this cancellation
A
which became the subject matter of writ petition No.6770/
2007 and the writ petition was decided vide order dated
11.12.2007 by another Single Judge Bench directing the
Chief Secretary for resolving the dispute. As already
mentioned above, the petitioner did not challenge the order
B
dated 11.12.2007 and submitted a detailed representation
dated 20.02.2009 to the Chief Secretary. The impugned
decision taken by the 9hief Secretary is in pursuance of
the directions given by the- High Court in Writ petition No.
6770/2007 in which the petitioner was also a party. There c
is, thus, no violation of the principles of natural justice. The
decision reached by the Chief Secretary directs that the
entire amount paid by the petitioner be returned to it with
interest. The decision does not fix the rate of interest but
we.feel that 9% will be the proper interest having regard
0
to all the circumstances. In view of the direction to return
the amount with interest, as decided by us, there would be
apparently no loss to the petitioner. The respondents are
directed to return the amount with interest within four
months from today. If the petitioner still feels that there has
E
been a breach of contract, it can pursue the remedy of
·specific performance or damages before a competent civil
'court. We, therefore, decline to interfere with the decision
of the Chief Secretary except fixing the rate of interest, as
indicated above."
26. In view of the aforesaid directions, the High Court also
disposed of the Contempt Petition No. 469 of 2008, Review
Applicatio_n Nos. MCC No. 99 of 2009 and MCC No. 893 of
_ 200.8 without any further directions.
27. We have heard the learned counsel for the parties.
28. Mr. R.F. Nariman and Mr. P.S. Patwalia, learned senior
counsel, appearing for the appellant submitted that the
reasoning adopted by the High Court in Paragraph 15 of the
impugned judgment, which has been reproduced above, was
F
G
H
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[2014] 5 S.C.R.
A not even supported by the respondents. The first reason given
by the High Court is that the Order dated 5th August, 2005 in
Writ Petition No. 636 of 2005 can not be implemented after
cancellation of lease deed by the IDA. This, according to the
learned senior counsel, is without any basis as by the order
B dated 22nd February, 2009, the Chief Secretary had cancelled
the lease deed. Therefore, the order dated 2nd November,
2007 having been nullified, the lease in favour of MPRTC
revived. This would also revive the application of MPRTC to cull
the agreement with the appellant. The second reason given by
c the High Court, according to Mr. Nariman and Mr. Patwalia is
that the order dated 11th December, 2007 passed in Writ
Petition No. 6770 of 2007 was not challenged by the appellant,
can not be supported in law. It is pointed out by the learned
senior counsel that the aforesaid writ petition was filed by
D MPRTC challenging the order of cancelling the deed in. its
favour by the IDA. The appellant was not at all involved in the
aforesaid tis. In any event, the High Court had not passed any
order on merits. It had merely left it for the Chief Secretary to
decide the issue. Therefore, no cause had arisen to the
appellant to challenge the order dated 11th December, 2007.
E It is further pointed out that the Chief Secretary in fact decided
the substance of the writ petition. Substance of the grievance
raised in the writ petition was decided in favour of MPRTC by
setting aside the order of cancellation of the lease by the IDA.
It is pointed out by the learned senior counsel that IDA has not
F challenged the order of the Chief Secretary cancelling the
direction of IDA with regard to the cancellation of the lease.
29. Learned senior counsel further submitted· that the Chief·
Secretary was expected to take a decision in accordance with
G law, i.e., in accordance with the order of the High Court that has
become final and binding and not contrary to that. Furthermore,
the order of the Chief Secretary on directions (Ill}, (IV) and (V),
which affect the rights of the appellant was challenged in the
writ petition in which the impugned judgment has been passed.
H According to the appellant, the decision Nos. (I) and (II) were
SRI RAM BUILDERS v. STATE OF M.P.
705
[SURINDER SINGH NIJJAR, J.]
correct and, therefore, there were no occasion to challenge the
A
same. The directions (Ill), (IV) and (V) are contrary to Directions
(I) and (II) and were beyond the scope of the controversy raised
in Writ Petition No. 6770 of 2007, which had been referred to
the Chief Secretary by the High Court. The order of the
Secretary has been passed without issuing any notice to the
B
appellant, even though in the writ petition, the appellant was
impleaded as Respondent No. 3. It is pointed out by the learned
senior counsel that by way of abundant caution, the appellant
has challenged the order dated 11th December, 2007, passed
in Writ Petition No. 6770 of 2007 in S.L.P.(C) No. 36887 of c
2012.
30. Next it was submitted by the learned senior counsel
that the actions of Madhya Pradesh Road Transport
Corporation (Respondent No.3) are in gross contempt of the
orders dated 5th August, 2005, which have not been purged
D
till date. The aforesaid order. has become final after the
dismissal of SLP (C) No. 20038 of 2005 on 7th October, 2005.
lt is.submitted that the Review Petition MCC No. 99 of 2009
filed on 2nd January, 2006 after dismissal of the aforesaid SLP
on 7th October, 2005 is an abuse of process and not
E
maintainable. In support of this submission, learned senior
counsel relies on Meghmala & Ors. Vs. G. Narasimha Reddy
& Ors. 1 (Paras 25 and 26). Similarly, the Review Petitian MCC
No. 8.93 of 2008 is not maintainable for the same reason. In
any event, the Review Petition was not decided on merits, which
F
was disposed of in view of the impugned order passed in the
Writ Petition with regard to the cancellation of the lease.
31. Thereafter, very detailed submissions have been made
on .the construction of the lease deed. However, it must be
G
noticed here that the manner in which these submissions have
been advanced before us bear no resemblance to the manner
in ~hich these submissions were made before the High Court.
1..
(2010) a sec 383.
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SUPREME COURT REPORTS
[2014] 5 S.C.R.
A
32. Mr. R.F. Nariman has also submitted that the term of
lease has to be understood to have commenced from
26.05.2004, when the IDA executed a formal lease in favour
of MPRTC. Further, learned senior counsel submitted thaf the
possession of the site in terms of the lease cannot be held to
8 be given on 22.1.1982, when the agreement to lease was
executed. It was further submitted that where a literal reading
of the lease leads to an absurdity, the court has the power to
read it reasonably. Such a reasonable reading, according to
Mr. Nariman, would support the aforesaid submission, i.e. the
C lease commences from 26.05.2004. In this context, learned
senior counsel rely upon the following cases: DOA vs. Durga
Chand Kaushish2; Ramkishore Lal vs. Kamal Narian3 and
Sahebzada Mohammad Kamgar Shah vs. Jagdish Chandra
Dea Dabhal Deo.4 These cases reiterate the well established
principles of law relating to the construction of deeds, which are
D as follows: first, that the intention of the parties to a grant must
be ascertained first and foremost from the disposition clause.
Second, clear disposition by an earlier clause will not be
allowed to be cut down by a later clause; and third, that a deed,
being a grantor's document, has to be interpreted strictly
E against him and in the favour of the grantee.
33. Mr. Nariman also submitted that the Respondents
cannot rely upon Clause 5E of the Agreement to Lease, after
the execution of the Lease Deed. Substantiating this, it was
F submitted that the Renewal Clause in the Agreement to Lease
stood superseded by the express terms of the Lease Deed
dated 26.05.2004. In this context, he ~elied upon Provash
Chandra Dalui vs. Biswanath Banerjee5 and State of U.P. vs.
Lalji Tandon. 6
G
2.
(1973) 2 sec 825 ..
3.
(1963) Supp (2) SCR 417.
4.
(1960) 3 SCR 604.
5.
(1989) Supp (1) SCC 487 (Para 14).
H
6.
(2004) 1 sec 1 (Para 13).
SRI RAM BUILDERS v. STATE OF M.P.
707
[SURINDER SINGH NIJJAR, J.]
34. Further .according to Mr. Nariman, the terms of the
A
Agreement to Lease cannot be relied upon when a specific
provision has been provided in the Lease Deed itself, which
provides.for extension of the lease. Clause (1) of the Lease
enables the IDA to extend the lease for which neither the
renewal nor permission of the State Government is necessary.
B
35. The argument of the Respondents that the Agreement
of the MPRTC with the Appellant has been frustrated was
sought to be countered by Mr. Nariman. It was submitted that
self induced frustration cannot be a basis to frustrate a valid
C
agreement. In this context, it was contended that the submission
of the Respondents that MPRTC is being wound up is not
tenable since such winding up is the result of an act of the Party
itself. Reliance placed upon Boothlinga Agencies vs. V. T.