# The Municipal Corporation of Greater Mumbai & Ors v. Century Textiles and Industries Limited & Ors

- **Citation:** 2025 INSC 36
- **Court:** Supreme Court of India
- **Decided:** 2025-01-07
- **Case number:** Civil Appeal No. 6667 of 2023
- **Bench:** Vikram Nath, Prasanna B. Varale
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-municipal-corporation-of-greater-mumbai-ors-v-century-textiles-and-38824
- **Pages:** 49

## Headnote

Issue arose whether the appellant-Corporation was bound to
convey the lease in favour of the respondent in terms of s.51 of
the Bombay Improvement Trust Transfer Act, 1925; and whether
writ petition filed before the High Court sufferred from delays and
laches and was liable to be dismissed as the cause of action had
arisen in 1955 whereas the writ petition was filed in 2016 after a
delay of 61 (sixty-one) years.
Headnotes†
Bombay Improvement Trust Transfer Act, 1925 - ss.48, 51 -
Mumbai Municipal Corporation Act, 1888 - s.527 - City of the
Bombay Improvement Act, 1898 - s.32B - Poorer Classes
Accommodation Scheme-PCAS - Default and determination
of lease - Execution of conveyance - In 1918, PCAS approved
for respondent no. 1 which provided for construction of 44
Blocks of poorer class dwellings containing a total of 980
rooms and 20 shops as a pre-condition for execution lease
u/s.32G - Scheme duly notified - Respondent no. 1 constructed
476 dwellings and 10 shops till 1925, as a part of the
pre-condition for execution of lease - 1898 Act repealed by
the Act of 1925 - Respondent no.1 applied to the Improvement
Trust under the 1925 Act for alteration of the notified Scheme
and the same was granted - According to the resolution,
Block-B and Block-C was to be excluded - Block-B was
conveyed to the respondent no.1 - Lease of Block-A for a
period of 28 years granted to the company, which was to expire
in 1955 - For 51 years, neither the appellant nor respondent
no.1 initiated any proceedings against each other - In 2006,
respondent No.1 served notice u/s.527 of the 1888 Act on the
* Author
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appellant that after expiry of lease period of 28 years, the said
property ought to be conveyed to the respondent No.1 and,
on failure to do so the respondent No.1 would be constrained
to file a suit - However, no suit ever filed - Respondent no.1
requested to execute formal deed of conveyance in 2014 and
2016, however, no action taken - Respondent No.1 then filed
writ petition in 2016 - High Court allowed the same directing
the appellant to execute formal conveyance of plot in favour
of the respondent No.1 - Sustainability:
Held : Not sustainable - Terms and conditions of the lease
agreement reveal no stipulation that on the expiry of the lease,
after completion of 28 years, the appellants would be bound to
convey the said land to respondent no.1 - Neither the Board
Resolution nor the lease deed and neither the statutory framework
in force imposed any obligation upon the appellant to execute
a conveyance in favour of the respondent no.1 - High Court
misinterpreted the same to be a condition incorporated in the lease
deed for conveyance, on expiration of 28 years - Harmonious
and contextual interpretation of ss.48(a) and 51(2) of the 1925
Act, as well as the clear absence of any covenant to that effect
in the lease deed, unequivocally demonstrates that no vested
right to conveyance arose on the expiration of the lease - Rather
than insisting that "shall convey" in s.51(2) invariably means an
unconditional obligation, it is more appropriate to understand that it
calls for conveyance only where the arrangement and compliance
align with the statutory prerequisites - Absent any express statutory
mandate or contractual stipulation, the claim for compulsory
conveyance at the end of the lease term must fail - Respondent
no.1 failed to take any active step in furtherance of getting such
a conveyance executed at the end of the lease term - Thus, the
appellants neither bound nor were under any legal obligations to
convey the premises to the respondent no.1 - As regards delay
and laches, no merit in the conduct of the respondent no. 1 where
it deliberately chose to sit still on its rights for a long period of
fifty-one years - Writ petition filed before the High Court in 2016
clearly a route adopted to subvert the long delay of sixty-one
years which cannot be condonable - View taken by the High
Court in tre

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[2025] 1 S.C.R. 313 : 2025 INSC 36
The Municipal Corporation of Greater Mumbai & Ors.
v.
Century Textiles and Industries Limited & Ors.
(Civil Appeal No. 6667 of 2023)
07 January 2025
[Vikram Nath* and Prasanna B. Varale, JJ.]
Issue for Consideration
Issue arose whether the appellant-Corporation was bound to
convey the lease in favour of the respondent in terms of s.51 of
the Bombay Improvement Trust Transfer Act, 1925; and whether
writ petition filed before the High Court sufferred from delays and
laches and was liable to be dismissed as the cause of action had
arisen in 1955 whereas the writ petition was filed in 2016 after a
delay of 61 (sixty-one) years.
Headnotes†
Bombay Improvement Trust Transfer Act, 1925 - ss.48, 51 -
Mumbai Municipal Corporation Act, 1888 - s.527 - City of the
Bombay Improvement Act, 1898 - s.32B - Poorer Classes
Accommodation Scheme-PCAS - Default and determination
of lease - Execution of conveyance - In 1918, PCAS approved
for respondent no. 1 which provided for construction of 44
Blocks of poorer class dwellings containing a total of 980
rooms and 20 shops as a pre-condition for execution lease
u/s.32G - Scheme duly notified - Respondent no. 1 constructed
476 dwellings and 10 shops till 1925, as a part of the
pre-condition for execution of lease - 1898 Act repealed by
the Act of 1925 - Respondent no.1 applied to the Improvement
Trust under the 1925 Act for alteration of the notified Scheme
and the same was granted - According to the resolution,
Block-B and Block-C was to be excluded - Block-B was
conveyed to the respondent no.1 - Lease of Block-A for a
period of 28 years granted to the company, which was to expire
in 1955 - For 51 years, neither the appellant nor respondent
no.1 initiated any proceedings against each other - In 2006,
respondent No.1 served notice u/s.527 of the 1888 Act on the
* Author
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appellant that after expiry of lease period of 28 years, the said
property ought to be conveyed to the respondent No.1 and,
on failure to do so the respondent No.1 would be constrained
to file a suit - However, no suit ever filed - Respondent no.1
requested to execute formal deed of conveyance in 2014 and
2016, however, no action taken - Respondent No.1 then filed
writ petition in 2016 - High Court allowed the same directing
the appellant to execute formal conveyance of plot in favour
of the respondent No.1 - Sustainability:
Held : Not sustainable - Terms and conditions of the lease
agreement reveal no stipulation that on the expiry of the lease,
after completion of 28 years, the appellants would be bound to
convey the said land to respondent no.1 - Neither the Board
Resolution nor the lease deed and neither the statutory framework
in force imposed any obligation upon the appellant to execute
a conveyance in favour of the respondent no.1 - High Court
misinterpreted the same to be a condition incorporated in the lease
deed for conveyance, on expiration of 28 years - Harmonious
and contextual interpretation of ss.48(a) and 51(2) of the 1925
Act, as well as the clear absence of any covenant to that effect
in the lease deed, unequivocally demonstrates that no vested
right to conveyance arose on the expiration of the lease - Rather
than insisting that "shall convey" in s.51(2) invariably means an
unconditional obligation, it is more appropriate to understand that it
calls for conveyance only where the arrangement and compliance
align with the statutory prerequisites - Absent any express statutory
mandate or contractual stipulation, the claim for compulsory
conveyance at the end of the lease term must fail - Respondent
no.1 failed to take any active step in furtherance of getting such
a conveyance executed at the end of the lease term - Thus, the
appellants neither bound nor were under any legal obligations to
convey the premises to the respondent no.1 - As regards delay
and laches, no merit in the conduct of the respondent no. 1 where
it deliberately chose to sit still on its rights for a long period of
fifty-one years - Writ petition filed before the High Court in 2016
clearly a route adopted to subvert the long delay of sixty-one
years which cannot be condonable - View taken by the High
Court in treating the petition to be not suffering from any delay
and laches cannot be sustained - Furthermore, the preamble
to the 1925 Act states that enactment was for constructing new
[2025] 1 S.C.R.
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The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
sanitary dwellings for certain classes of the inhabitants of the city
to secure tangible benefits for the poorer sections of society -
Lease deed did not confer any rights to convert the usage of the
lands for commercial purposes - Land allocated under a special
scheme, on "poorer classes" accommodation, when sought to be
commercially exploited, represents a direct affront to the spirit of
the enactment - Such conduct amounts to abuse of beneficial
legislation - Public trust reposed in the private entity to serve a
greater good is thus betrayed - This not only harms the class
of beneficiaries whom the legislation and agreement designed
to protect and imperils the broader public interest - Impugned
judgment of the High Court set aside [Paras 36, 37, 38, 44,
53-55, 58, 63, 64-69, 70].
Bombay Improvement Trust Transfer Act, 1925 - ss.48 and 51 -
s.48 providing the general conditions of the lease given under
the Poorer Classes Accommodation Scheme-PCAS placing
restrictions on the lessee as to how it would use and how the
rent etc. would be determined for letting out the tenements,
whereas s.51 provides for default, and determination of the
lease - Interpretation of ss.48 and 51:
Held : s.48(a) and s.51(2) must be read harmoniously so that
the duty to restore the premises at the end of the lease remains
intact, unless a clear contrary intention emerges, and the right
to conveyance u/s.51(2) thereof is recognized as contingent, not
automatic - Such a reading is consistent with the accepted principle
that statutory provision should not be construed in a manner that
would reduce another provision to a "dead letter - By employing
a harmonious construction, the 1925 Act's provisions are allowed
to complement rather than contradict one another - This approach
upholds the integrity of the legislative scheme, ensures that none
of its components are undermined, and maintains a balance
between the obligations imposed on a lessee and any rights that
may accrue at the end of the lease's tenure - If there is default,
then u/s.51(1), the Board has a right to re-enter upon the demised
premises whereas under sub-Section (2) thereof provides that
where no default is made, the Board shall convey the premise to
the lessee at his cost - It is neither necessary nor desirable to
treat s.51(2) as an absolute mandate that would override or negate
s.48(a) thereof - Interplay between ss.48(a) and 51(2) is resolved
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through a construction that acknowledges the necessity of leaving
the premises in good condition at the expiration of lease, while
recognizing that conveyance can be contemplated only where
such a course is unequivocally aligned with the lease terms and
the statutory framework as a whole - This reconciliation preserves
the intention of the legislature, avoids destructive interpretations,
and provides coherent, just, and practical reading of the statute.
[Paras 46-52]
Interpretation of statutes - Principles of statutory interpretation -
Explanation:
Held : Principles of statutory interpretation demand that no provision
of a statute should be rendered nugatory or superfluous - Statute
must be construed as a coherent whole, ensuring that each part
has meaningful content and that the legislative scheme remains
workable - Where two provisions appear to be in tension, a
construction that reconciles them is to be allowed, allowing both
to operate and giving effect to the underlying legislative intent.
[Para 48]
Case Law Cited
Shri Vallabh Glass Works Ltd. v. Union of India [1984] 3 SCR
180 : (1984) 3 SCC 362; CIT v. Hindustan Bulk Carriers [2002]
Supp. 5 SCR 387 : (2003) 3 SCC 57; Aflatoon v. Lt. Governor
of Delhi [1975] 1 SCR 802 : (1975) 4 SCC 285; SS Rathore
v. State of MP [1989] Supp. 1 SCR 43 : (1989) 4 SCC 582;
Sainik Motors v. State of Rajasthan [1962] 1 SCR 517; Sultana
Begum v. Prem Chand Jain [1996] Supp. 9 SCR 707 : (1997)
1 SCC 373 : AIR 1997 SC 1006; Lachoo Mal v. Radhey Shyam
[1971] 3 SCR 693 : (1971) 1 SCC 619; Sita Ram Gupta v.
Punjab National Bank [2008] 4 SCR 636 : (2008) 5 SCC 711; HR
Basavaraj v. Canara Bank [2009] 15 SCR 504 : (2010) 12 SCC
458; Murlidhar Agarwal and Anr. v State of Uttar Pradesh and
Others [1975] 1 SCR 575 : (1974) 2 SCC 472; Devkaran Nenshi
Tanna v. Manharlal Nenshi [1994] Supp. 1 SCR 679 : (1994) 5
SCC 681; PTC (India) Financial Services Ltd. v. Venkateswarlu
Kari [2022] 9 SCR 1063 : (2022) 9 SCC 704; Managing Director
Chattisgarh State Co-Operative Bank Maryadit v. Zila Sahkari
Kendriya Bank Maryadit and Ors. [2020] 5 SCR 307 : (2020)
6 SCC 411; J.K. Spinning and Weaving Mill Co Ltd. v. State of
[2025] 1 S.C.R.
317
The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
Uttar Pradesh & Others [1961] 3 SCR 185 : SCC Online SC 16;
Rameshwar and Others v. Jot Ram and Another [1976] 1 SCR
847 : (1976) 1 SCC 194; State of Maharashtra vs. Digambar
[1995] Supp. 1 SCR 492 : (1995) 4 SCC 683; Hari Singh v.
State of U.P. (1984) 2 SCC 624; Municipal Corporation of Greater
Bombay v. Industrial Development Investment Co. (P) Ltd. [1996]
Supp. 5 SCR 551 : (1996) 11 SCC 501; New Okhla Industrial
Development Authority v. Harkishan [2017] 1 SCR 572 : (2017)
3 SCC 588 - referred to.
List of Acts
Companies Act, 2013; City of Bombay Improvement Act, 1898;
Bombay Improvement Trust Transfer Act, 1925; Mumbai Municipal
Corporation Act, 1888.
List of Keywords
Conveyance of lease; Delays and laches; Harmonious and
contextual interpretation; Shall convey; Claim for compulsory
conveyance; Suit for specific performance or mandatory injunction;
Limitation; Constructing new sanitary dwellings for certain classes
of inhabitants of the city; Tangible benefits for the poorer sections of
society; Lease deed; Beneficial legislation; Public trust; Destructive
interpretations; Principles of statutory interpretation; Poorer Classes
Accommodation Scheme; Construction of poorer class dwellings;
Lease; Municipal Corporation of Greater Mumbai; Legal notice;
Harmonious Construction; Reduce any provision to dead letter;
No provision rendered nugatory; Delay of 51 years; Delay of 61
years; Delay not condonable; Writ petition to escape limitation;
Public welfare; Abuse of beneficial legislation.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6667 of 2023
From the Judgment and Order dated 14.03.2022 of the High Court
of Judicature at Bombay in WP No. 295 of 2017
Appearances for Parties
Neeraj Kishan Kaul, Dhruv Mehta, Darius J. Khambatta, Shyam
Divan, Ranjit Kumar, Sr. Advs., Ashish Wad, Manoj Wad, Mrs.
Tamali Wad, Siddharth Dharmadhikari, Sandeep Mohan Patil, Ajeyo
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Sharma, Ms. Akriti Arya, Keith Verghese, Ms. Ira Mahajan, M/s. J
S Wad And Co, Ms. Nina R. Nariman, J. N. Mistry, Ms. Namrata
Parikh, Aditya Panda, Sudipto Sardar, Saswat Pattnaik, Aniruddha
Deshmukh, Aaditya Aniruddha Pande, Bharat Bagla, Sourav Singh,
Aditya Krishna, Ms. Preet S. Phanse, Adarsh Dubey, Advs. for the
appearing parties.
Judgment / Order of the Supreme Court
Judgment
Vikram Nath, J.
1.
The Municipal Corporation of Greater Mumbai1 and its officers have
filed this appeal assailing the correctness of judgment and order
dated 14.03.2022 passed by the Bombay High Court allowing the Writ
Petition No. 295 of 2017 filed by the Respondent No.1 directing the
appellant (Respondent No.1 therein) to execute formal conveyance
of plot bearing C.S. No.1546 of Lower Parel Division, Mumbai in
favour of the Respondent No.1 (Petitioner no.1 therein) within a
period of eight weeks.
2.
Brief facts giving rise to the present appeal are summarised hereunder:
2.1.
Century Textiles and Industries Limited (Respondent No.1) is
a company incorporated under the Companies Act running
a cotton mill. Under the provisions of the City of Bombay
Improvement Act, 1898,2 Respondent No.1 applied to the
Improvement Trust under Section 32B thereof under the
Poorer Classes Accommodation Scheme (in short, "PCAS")
to provide dwellings to the poorer class workers. The said
application was filed on 12.04.1918.
2.2.
The Improvement Trust Board, vide Resolution no. 121, in
its meeting dated 16.04.1918, approved the PCAS of the
Respondent No.1 which provided for construction of 44
Blocks of poorer class dwellings containing a total of 980
rooms and 20 shops as a pre-condition for execution of
the lease under Section 32G of the 1898 Act (as amended
in 1913), with other consequences to follow.
1
MCGM
2
The 1898 Act
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The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
2.3.
It would be worthwhile to mention here that the construction
was to take place on a piece of land measuring 50,000
sq. yds. sub-divided into three plots A, B and C. However,
at present, the dispute relates only to plot A admeasuring
23,000 sq. yds.
2.4.
The above scheme, as approved by the Board, was duly
notified on 01.05.1918 as Scheme No. 51. The Special
Collector handed over the charge of the property/plot bearing
C.S. No. 1546 of Lower Parel Division to the Improvement
Trust, pursuant to the aforesaid Resolution No. 121 and
the notification of Scheme No. 51, sometime in August,
1919. The possession of the said plot was, later on, handed
over by the Improvement Trust to the Respondent No.1,
whereupon, they started the construction and constructed
476 dwellings and 10 shops till the year 1925, as a part
of the pre-condition for execution of lease under Section
32G of the 1898 Act.
2.5.
In the year 1925, the 1898 Act was repealed by The Bombay
Improvement Trust Transfer Act, 1925.3 On 10.03.1927,
Respondent No.1 applied to the Improvement Trust under
Section 37(2) of the 1925 Act for alteration of the notified
Scheme No. 51. Again, on 20.05.1927, Respondent No.1,
through their solicitors M/s C.N. Wadia and Company applied
to the Improvements Committee making the same request
for modification of the notified Scheme No. 51 requesting the
committee to accept the 476 rooms instead of 980 rooms and
10 shops instead of 20 shops, as required under the notified
scheme. The Improvement Trust/Board, vide Resolution
No. 325 dated 31.05.1927, granted alteration of the notified
Scheme No. 51. According to the said resolution, Block-B
and Block-C would be excluded from Estate Agent's plan,
lease of Block-A for a period of 28 years to be granted to
the company on the terms mentioned in paragraphs 2 and 4
of the letter dated 20.05.1927, Block-B to be conveyed to
the Respondent No.1 on terms and conditions stated in
paragraph 5 of the letter dated 20.05.1927 and Block-C to
remain the property of the Improvement Trust/Board.
3
The 1925 Act
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2.6.
Pursuant to the said Resolution No. 325, Block-B was
conveyed to the Respondent No.1 on 10.01.1928 for
which the Respondent No.1 paid Rs.1,20,000/- as sale
consideration.
2.7.
Later on, a lease was granted by the Board in favour of
Respondent No.1 on 03.10.1928 with respect to Block-A,
which included both the land and buildings for a period of
28 years w.e.f. 01.04.1927 at a yearly rent of Rupee One.
The lease was to expire on 31.03.1955 i.e. on completion
of 28 years. The Respondent No.1 also paid the expenses
of acquisition which had been incurred by the Board.
2.8.
For a period of 51 years, neither the appellant nor the
Respondent No.1 initiated any proceedings against each
other - the Respondent No.1 for getting the conveyance
executed, as is being claimed now, and the appellant for
eviction of the Respondent No.1 as the lease period had
expired. The fact remains that the Respondent No.1 has
continued in possession of the land and buildings comprised
in Block-A.
2.9.
The Respondent No.1, on 14.08.2006, served a legal notice
under Section 527 of the Mumbai Municipal Corporation
Act, 18884 on the appellant stating that as per the lease
agreement, after expiry of lease period of 28 years, the said
property ought to be conveyed to the Respondent No.1 and,
on failure to do so within the specified period, the Respondent
No.1 would be constrained to file a suit. However, no suit
was ever filed by the Respondent No.1.
2.10. In 2009, an application was filed by the Respondent No.1
for redevelopment of the land in question to the appellant
as, according to the Respondent No.1, they had closed the
mill in 2008 and they wanted to shift the mill industry out of
the land in question.
2.11. Another communication dated 21.04.2009 was sent by the
Respondent No.1 to the appellant, requesting for conveyance
of Block-A as per the lease deed. The MCGM apparently
approved an integrated development scheme on 17.03.2011
with respect to Block-A Plot bearing C.S. No.1546. The
4
The 1888 Act
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Century Textiles and Industries Limited & Ors.
Assistant Commissioner (Estate) of the appellant was of
the opinion that Block-A should not be conveyed to the
Respondent No.1 which is apparent from the internal report
dated 17.06.2013.
2.12. A meeting between the parties was held in March, 2014
after which, once again, the Respondent No.1 requested,
vide letter dated 27.03.2014, to execute a formal deed
of conveyance. The Respondent No.1, vide letter dated
30.11.2016, again called upon the appellant to execute a
formal deed of conveyance in view of Section 51(2) of the
1925 Act. When no action was taken by the appellant, the
Respondent No.1 filed writ petition before the Bombay High
Court in December, 2016 which was registered as W.P.
No. 295 of 2017. The reliefs claimed by means of the said
petition are reproduced hereunder :
"29. ...The Petitioners therefore pray :
a) For a Writ of mandamus or a writ in the nature
of mandamus or for any appropriate writ, order or
direction ordering and directing Respondent Nos. 1
and 2 (and their servants, officers and agents)
to recognize and proceed on the basis that the
said Premises being plot bearing C.S.No.1546 of
Lower Parel Division and the buildings standing
thereon vest in Petitioner No. 1 by virtue of the
provisions of the Improvement Acts and as the
absolute owners thereof.
b) For a writ of mandamus or a writ in the nature
of mandamus or any other appropriate writ, order
or direction under Article 226 of the Constitution of
India ordering and directing the Respondent No.1
(and its servants, officers and agents) to do all such
acts and things as may be necessary for formalizing
the vesting of the said Premises in Petitioner
No.1 herein including by executing and thereafter
registering with the Sub Registrar of Assurances a
Deed of Conveyance of the said Premises.
c) For a writ of mandamus or a writ in the nature
of mandamus or any other appropriate writ, order
or directions under Article 226 of the Constitution
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of India ordering and directing the Respondent
No.2 (and its servants, officers and agents) to
do all such acts and things as may be necessary
for reflecting the name of Petitioner No.1 in the
records of the Collector of Mumbai in respect of
the said plot of land bearing C. S. No. 1546 of
Lower Parel Division;
d) That pending the hearing and final disposal
of this Petition this Hon'ble Court be pleased
to direct the Respondents by themselves their
servants, agents, officers and sub-ordinates to
consider all applications from Petitioner No.1 as
emanating from the owner of the said Premises
and deal with them in all matters relating to the
said Premises as if Petitioner No.1 were the
owner thereof.
e) for ad-interim reliefs in terms of prayer
(d) above;
f) for costs of this Petition; and
g) for such other and further relief as the nature
and circumstances of the case may require be
passed."
2.13. During the pendency of the petition, the Respondent No.1
moved two amendments to the writ petition. The first one
in June, 2017, challenging the Directions note prepared
on the internal file of the appellant recommending to stop
the ongoing work and the approval granted under the
integrated scheme to be recalled and cancelled. Further
relief seeking ad interim relief against the said action
was also sought.
2.14. The appellant issued a show cause notice dated
28.03.2018 as to why the amended IDS lay out should
not exclude Block-A Plot bearing C.S. No.1546. Upon
receipt of the said notice, the Respondent No.1 moved
the second amendment to the writ petition to challenge
the said show cause notice. Under orders of the Bombay
High Court dated 12.04.2018, the appellant was directed
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The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
not to proceed to adjudicate on the show cause notice
until further orders.
2.15. After hearing the learned counsel for the parties and based
on material on record, the High Court by the impugned
judgment dated 14.03.2022, allowed the writ petition and
issued appropriate directions to the appellant to execute
the conveyance of the plot in question. Aggrieved by the
same, MCGM is in appeal. While issuing notice dated
13.07.2022, this Court granted an order of status quo
to be maintained by the parties. Pleadings have been
exchanged.
3.
We have heard Shri Dhruv Mehta and Shri Neeraj Kishan Kaul,
learned senior counsels for the appellants; Shri Darius J. Khambatta,
Shri Ranjit Kumar and Shri Shyam Divan, learned senior counsels
appearing for the respondents and, also perused the material on
record.
4.
The submissions of the learned counsels appearing for the appellants
are briefly summarized hereunder :
A.
Delay and Laches in filing the Writ Petition
5.
The term of the lease dated 03.10.1928 in favour of the Respondent
No.1 expired on 31.03.1955. According to the Respondent No.1, it
was purportedly entitled to a deed of conveyance on expiry of the
aforesaid period. As such, the cause of action would arise immediately
after the expiry of the term of the lease. Respondent No.1 took no
legal action before any court of law, right from 1955 till the end of
2016 i.e. for 61 years when it filed the writ petition before the High
Court on 23.12.2016. Thus, it was submitted that the petition was
highly barred by laches and ought to have been dismissed on such
grounds.
6.
It was also submitted that in 2006, a legal notice dated 14.08.2006
under Section 527 of the 1888 Act was issued by Respondent No.1,
requiring the appellant to execute the conveyance deed. The limitation
provided for filing a suit under Section 527 of the 1888 Act is six
months. But Respondent No.1 took no action thereafter for more than
10 years. No suit was ever filed by the Respondent No.1. Knowing
fully well that the limitation under Section 527 of the 1888 Act had
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expired long back, they chose to file the writ petition in December,
2016. The submission is that preferring a writ petition could not do
away with the issue of limitation which would arise while availing
the statutory remedies available. In such circumstances, the High
Court fell in error in entertaining the writ petition and holding that the
filing of the writ petition even after 61 years would not suffer from
delay or laches. In support of the said submissions, the following
two judgments are relied upon :
i)
Shri Vallabh Glass Works Ltd. v. Union of India,5
ii)
SS Rathore v. State of MP6
B.
Effect of Section 51(2) read with Section 48 of the 1925
Act thereof
7.
Section 51(2) which talks about default and determination of lease
uses the expression "shall convey" that in a situation where there is
no default in complying with the obligations under the lease document,
the Board shall convey the premises in favour of lessee on expiration
of the lease. Whereas, Section 48(a) states that the lessee would keep
the demised premises together with its fixtures in good and substantial
repair and condition during the term of the lease and leave at the
end thereof. The submission is that while reading both the provisions
together and in order to give a harmonious construction, the expression
"shall convey" must be read as "may convey". It is also submitted that
in case Section 51(2) is read with the expression "shall convey", then
the expression used in Section 48(a) that the lessee would leave at the
end of the term of the lease, would have no meaning and would be
rendered as otiose or superfluous. In support of the said submissions,
the following decisions are relied upon by the appellants :
i)
CIT v Hindustan Bulk Carriers,7
ii)
Sultana Begum v. Prem Chand Jain,8
iii)
Sainik Motors v. State of Rajasthan9
5
[1984] 3 SCR 180 : (1984) 3 SCC 362
6
[1989] Supp. 1 SCR 43 : (1989) 4 SCC 582
7
[2002] Supp. 5 SCR 387 : (2003) 3 SCC 57
8
[1996] Supp. 9 SCR 707 : (1997) 1 SCC 373
9
[1962] 1 SCR 517 : (1962) 1 SCR 517
[2025] 1 S.C.R.
325
The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
C.
Concept of contracting out of the obligations and waiving
of the statutory rights by either of the parties to a contract.
8.
Highlighting the concept of contracting out of obligations arising out
of a contract and waiving the statutory rights, it has been submitted
that by now, it is well-settled that the party can legally do so and
such principle has been duly recognised by this Court in the following
decisions:
i)
Lachoo Mal vs. Radhey Shyam10
ii)
Sita Ram Gupta v. Punjab National Bank11
iii)
HR Basavaraj v. Canara Bank12
The appellants would be entitled to the benefit of said concept in
the facts and circumstances of the case.
D.
Misreading by the High Court
9.
According to the appellant, the High Court committed serious
error by misreading some of the relevant documents and reading
something which is not stated in such documents. Details of the
same would be discussed while analysing the said arguments.
However, in particular, we may note that the pleadings have referred
to the Resolution of the Board dated 31.05.1927 as having been
misread and secondly the lease deed dated 03.10.1928 as also
having been misread.
E.
Relevancy of the internal notings and communications
inter se officers of the Corporations
10. The submission is that until and unless the order is approved by the
Competent Authority of the Corporation and issued by its Authorised
Officer, Respondent No.1 could not derive any advantage of any
internal noting or communications of the Corporation. The High
Court committed error in relying upon such noting and internal
communications without there being a decision of the Competent
Authority duly communicated to the parties. In support of the said
10
[1971] 3 SCR 693 : (1971) 1 SCC 619
11
[2008] 4 SCR 636 : (2008) 5 SCC 711
12
[2009] 15 SCR 504 : (2010) 12 SCC 458
326
[2025] 1 S.C.R.
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submissions, reliance is placed upon the judgment in the case of
Shanti Sports Club vs. Union of India.13
F.
No legal rights accrued to the Respondent No.1 for vesting
of lease/conveyance of Block-A in terms of the 1925 Act
11. The 1925 Act replaced the 1898 Act, which stood repealed.
Referring to the Section 32I(2) of the 1898 Act which stood
replaced by Section 51 of the 1925 Act, it was argued that under
the 1898 Act, it was mentioned that where no default is made in
the conditions of the lease, then on determination of the lease, all
the right, title, and interest of the Board shall vest in the employer
free from all liabilities. Whereas, under Section 51 of the 1925 Act,
under sub-Section (1) on default being made, the Board had the
right to re-enter, and under sub-Section (2), where no default is
made, then on determination of the lease, the Board shall convey
the premises to the lessee at his cost and free of all restrictions
and liabilities imposed under the lease. It was, thus, submitted
that under the 1925 Act, there was no automatic vesting but a
separate deed of conveyance to be executed at the cost of the
lessee. This is the provision where the submission that the word
"shall convey" may be read as "may convey" read with Section 48(a)
of the 1925 Act. It was also submitted that the word used "at his
cost" in Section 51(2) clearly meant that for a conveyance by the
Board, the lessee would be required to make a separate payment
for such a conveyance.
G.
Payment of cost of Scheme does not entitle Respondents
to any rights in the land itself.
12. The claim of the Respondent No.1 that it had incurred huge
expenditure as cost of the Scheme at the time of acquisition of the
land by the Board entitled it to a conveyance without any further
payment of cost of the land, is misplaced. The benefits admissible
to the Respondent No.1 under the lease deed were in return of the
bearing of the cost of the Scheme. It only envisaged a lease for 28
years, subject to terms and conditions recorded thereunder, but no
conveyance. For conveyance, separate costs were required to be
13
[2009] 13 SCR 710 : (2009) 15 SCC 705
[2025] 1 S.C.R.
327
The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
paid at the time of conveyance as per the scheme of the 1925 Act.
It was submitted that the Respondent No.1 filed writ petition only
to make huge profits under the public welfare scheme by usurping
land valued at around Rs. 1200 crores without paying a penny.
13. On such submissions, it was prayed that the appeal be allowed, the
impugned judgement of the High Court be set aside and the writ
petition be dismissed.
14. On the other hand, the learned senior counsels for the Respondent
No.1 prayed for dismissal of the appeal by making the following
submissions:
A.
The lease confers the right to conveyance on Respondent
No.1
15. It is submitted that as the lease deed dated 03.10.1928 stated that the
Board agreed to alter Scheme No.51 'pursuant to the lessee's request',
as such, the lessee's request which contained the following expression
'convey to the lessees the said portion of land at the expiration of the
said term', clearly indicates that the appellant was obliged to execute
the conveyance on expiration of the lease. Even if no specific mention
of the conveyance is mentioned in the lease deed, since the appellant
agreed to alter the Scheme No. 51, they were now estopped from
denying the right of Respondent No.1 to conveyance.
B.
Board Resolution No. 325 and lease cannot be used to
contract out of Section 51(2) of the 1925 Act
16. The application dated 20.05.1927 submitted by Respondent No.1
for alteration of the Scheme No.51, is reproduced in the Board
Resolution No. 325 which accepted paragraph nos. 2 and 4 thereof.
There was no occasion for the appellant today to claim that they
have contracted out of Section 51(2) of the 1925 Act. Neither the
lease deed mentioned specifically that they were contracting out of
Section 51(2) of the 1925 Act, nor at any stage thereafter have the
appellants taken this plea of contracting out.
C.
Section 108(q) of the Transfer of Property Act, 1882
17. It is submitted that the appellants never raised this plea before the
High Court relying on Section 108(q) of the Transfer of Property Act,
1882 being expressly excluded in the lease deed and therefore,
328
[2025] 1 S.C.R.
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giving them the right to re-possession may not and should not be
entertained by this Court.
D.
Vesting and execution of conveyance is mandatory and
cannot be contracted out
18. The submission is that the provisions of Section 51(2) of 1925 Act as
also the provisions of Section 32I(2) of the 1898 Act are mandatory
in nature as the word used is 'shall' and therefore, there is no
justification for the appellant to raise a plea of contracting out of the
terms of the lease or the statutory provisions. In support of the said
submission, the following judgments are relied upon:
i)
Murlidhar Agarwal and Anr. v State of Uttar Pradesh and
Others14
ii)
Devkaran Nenshi Tanna v. Manharlal Nenshi15
iii)
PTC (India) Financial Services Ltd. v Venkateswarlu Kari16
E.
Obligations of lessee/employer, recompense and composite
nature of scheme
19. Our attention has been drawn to the Scheme as spelled out in
the 1925 Act, counsels for Respondent No.1 referred to various
provisions and have submitted that once the lessee discharges all
his obligations, there is no reason why under the statutory scheme,
the land and building should not be conveyed to it. It was further
submitted that under the 1925 Act, the conveyance referred to is
akin to the vesting provided under Section 32I(2) of the 1898 Act.
F.
Section 51 of the 1925 Act, a special provision prevails over
Section 48(a) of the said Act which is a general provision
20. Referring to the provision under Section 48(a) and Section 51 of
the 1925 Act, it has been vehemently argued that Section 48, being
a general provision, deals with standard conditions of the lease to
be granted under the scheme. It only postulates that at the end of
the term of the lease, the lessee shall leave the demised premises
14
[1975] 1 SCR 575 : (1974) 2 SCC 472
15
[1994] Supp. 1 SCR 679 : (1994) 5 SCC 681
16
[2022] 9 SCR 1063 : (2022) 9 SCC 704
[2025] 1 S.C.R.
329
The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
and their fixtures "in good and substantial repair and condition".
It does not deal with as to what would happen during the period
of lease where there is a default or at the end of the lease where
there has been no default. It is Section 51 of the 1925 Act which
deals with the above two situations and, as such, this would be a
special provision. Relying upon the following two judgments, it was
submitted that the special provision would prevail over the general
provision and, therefore, there was no option but for the appellant
to execute the conveyance.
i)
Managing Director Chattisgarh State Co-operative Bank
Maryadit v Zila Sahkari Kendriya Bank Maryadit and Ors.17
ii)
J.K. Spinning and Weaving Mill Co Ltd. v State of uttar
Pradesh & Others18
G.
Meaning of the word "premises"
21. Submission on behalf of the Respondent No.1 is that the word
"premises" would include both land and building, as defined in
Section 3(gg) of the 1888 Act, which clearly means that the word
"premises" would include both, buildings and land. Since the
word "premises" is not defined in the 1925 Act, Section 5 of the
1925 Act provides that the words used in the 1925 Act but not
defined therein would have the same meaning as it does under
the 1888 Act.
H.
Public-Private Partnership
22. The Scheme as envisaged under the 1898 Act and the 1925 Act
was an early example of the Public-Private Partnership principle, by
which the Board was able to procure private funding for purposes
of providing housing to economically weaker section of the society
in exchange for vesting or conveying the land used for the Scheme.
The Respondent No.1 having discharged its obligations without a
single default, was entitled to the benefit of vesting/conveyance at
the end of the Scheme or the lease in the present case.
17
[2020] 5 SCR 307 : (2020) 6 SCC 411
18
[1961] 3 SCR 185 : SCC Online SC 16
330
[2025] 1 S.C.R.
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I.
A vested right cannot be divested by subsequent conduct
23. The submission is that once Respondent No.1 had a right to
conveyance at the end of the term of the lease, and which was an
indefeasible right, any amount of delay, laches, or other conduct
would not result in divesting of such rights. Reliance was placed
upon the judgement in the case of Rameshwar and Others vs.
Jot Ram and Another.19
J.
The appellants recognized and acknowledged the ownership
rights of Respondent No.1
24. On the above aspect, the internal correspondence and noting of the
Corporation have been referred to by the learned senior counsel at
different stages, which shall be dealt with appropriately at a later stage
by analysing the arguments raised by both the sides as to whether
such noting and internal communications within the Corporation
could be relied upon.
K.
Alleged Delay
25. In trying to explain the delay for approaching the Court after 61
years, it was submitted on behalf of the Respondent No.1 that the
possession of the Respondent No.1 has continued without any
obstruction by the appellant. At no stage during this entire period of
61 years, neither did the appellant sought possession of the Block-A
nor did they demand any rent for the same. The Respondent No.1,
for the first time, came to know that the Assistant Commissioner
(Estate) of the appellant had issued an opinion in June, 2013 that
the premises should not be conveyed to Respondent No.1. However,
even that opinion was never communicated to the Respondent No.1.
The High Court has dealt with this aspect of the matter and has
found that there was no delay on part of the Respondent No.1 in
approaching the Court. Reliance has been placed on the judgment
in State of Maharashtra vs. Digambar.20
26. Before proceeding to deal with the respective submissions, it would
be appropriate to refer to the relevant statutory provisions along with
19
[1976] 1 SCR 847 : (1976)1 SCC 194
20
[1995] Supp. 1 SCR 492 : (1995) 4 SCC 683
[2025] 1 S.C.R.
331
The Municipal Corporation of Greater Mumbai & Ors. v.
Century Textiles and Industries Limited & Ors.
the scheme of those enactments. The 1898 Act was promulgated with
the preamble stating inter alia improvement and future expansion
of city of Bombay by constructing new sanitary dwellings for certain
classes of inhabitants by laying out vacant lands and by reclaiming
and laying out parts of the foreshore of the island of Bombay.
27. In the 1898 Act, a substantial amendment came in the year 1913
whereby Section 32B to Section 32I were added. This is referred to
as the Amendment Act of 1913. Under the said amended provision,
the scheme had come whereby land would be acquired by the
Board constituted under the 1898 Act and, thereafter, given out
for development and construction to private parties on such terms
and conditions as the Improvement Trust, constituted under the
1898 Act, may determine and as also spelled out in the aforesaid
provisions. Sections 32B to 32I of the 1898 Act are reproduced
hereunder:
"Section 32B. Application by employer for Poorer
Classes Accommodation Scheme : (1) Any person
employing members of the poorer classes in the course of
his business may make an application to the Board stating
that he wishes to provide poorer classes' dwellings for
the use of all or some of such members and desiring the
Board to make a scheme for such purpose.