Vihuto Assumi v. State of Nagaland Represented by the Commissioner & Secretary, Department of Tourism
2024-12-12
MANISH CHOUDHURY
body2024
DigiLaw.ai
JUDGMENT : Manish Choudhury, J. Both the writ petitions have been preferred under Article 226 of the Constitution of India by the petitioner being aggrieved by the impugned actions on the part of the respondent authorities in the Tourism Department, Government of Nagaland. 2. It is the case of the petitioner that he is an indigenous inhabitant of Zunheboto District in the State of Nagaland. Pursuant to an application submitted by him and after having entered into a discussion with the authorities in the Directorate of Tourism / Tourism Department, Government of Nagaland, the petitioner entered into an agreement, styled as ‘Lease Deed Agreement’, on 06.09.2022, with the petitioner on one side and the Directorate of Tourism / Department of Tourism, Government of Nagaland, represented by the Director of Tourism, Nagaland on the other side. It is stated that the respondent Tourism Department is the sole legal owner of a landed property, that is, Tourist Lodge at Dimapur. By the Agreement dated 06.09.2022, an asset of the Tourism Department, ‘Restaurant [Catering Service]’ located at the Tourist Lodge, Dimapur was given on ‘lease’ to the petitioner for a period of 5 [five] years as per the terms and conditions agreed upon and delineated in the Agreement dated 06.09.2022. As per the said Agreement, the petitioner as the lessee / licencee was to furnish security deposit amounting to Rs. 2.50 lakhs in the form of a fixed special term deposit [STDR] drawn in favour of the Director, Department of Tourism. Subsequent to the execution of the agreement, the Department of Tourism, Government of Nagaland granted a permit to the petitioner on 08.09.2022, pursuant to Government approval, on 02.09.2022. By the permit, the petitioner was permitted to run his business at the Restaurant [Catering Services] area located at the Tourist Lodge, Dimapur for a period of 5 [five] years w.e.f. 01.10.2022 to 31.10.2027. As per the said permit, the Restaurant [Catering Services] was to be operated in a total area of 4031.92 sq. ft. at a monthly rent of Rs. 9.50 sq. ft. In the said permit dated 08.09.2022, it was indicated that the petitioner was to pay Rs. 38,303/-as a monthly rent for permitting him to operate the Restaurant [Catering Services], which was calculated as per the Standard of Rates [SoR] – 2016 of the Public Works Department [Housing].
ft. at a monthly rent of Rs. 9.50 sq. ft. In the said permit dated 08.09.2022, it was indicated that the petitioner was to pay Rs. 38,303/-as a monthly rent for permitting him to operate the Restaurant [Catering Services], which was calculated as per the Standard of Rates [SoR] – 2016 of the Public Works Department [Housing]. On being handed over the area of the Restaurant [Catering Services] to the petitioner, the petitioner started running the business of catering services therefrom. 3. When the petitioner was running the Restaurant [Catering Services] from the area measuring 4031.92 sq. ft. located at Tourist Lodge, Dimapur since after the execution of the Agreement dated 06.09.2022, the Directorate of Tourism, Nagaland was found to have written a letter to the respondent no. 4 vide Office Letter no. TOUR/MISC/48/2022-23/203 on 06.10.2023 whereby the respondent no. 4 was asked to take over the land and facility of the Tourist Lodge, Dimapur by 21.10.2023 in order to facilitate a Lease Agreement signed on 13.09.2023 for construction of a 4/5 Star or Higher Category Hotel with Entertainment and Retail Facilities at the landed property of Tourist Lodge, Dimapur under Public Private Partnership [PPP] model on Design, Build, Maintain, Operate, Manage and Transfer basis. Having learnt about execution of the Lease Agreement on 13.09.2023 for construction of a 4/5 Star or Higher Category Hotel at the same place wherefrom the petitioner was operating the Restaurant [Catering Services] and apprehending that because of execution of the Lease Agreement dated 13.09.2023 there was possibility of the petitioner being removed from the said place, the petitioner submitted a Representation before the Director of Tourism, Government of Nagaland on 18.09.2023 stating his apprehension. The petitioner had the apprehension that despite execution of an agreement with him for a period of 5 [five] years, the execution of another Agreement on 13.09.2023 with the respondent no. 4 for setting up a 4/5 Star or Higher Category Hotel at the same place would bring adverse consequences to the petitioner including his removal. The petitioner had highlighted that after the Agreement dated 06.09.2022, he had made substantial investments towards civil infrastructural works, etc. to run the Restaurant [Catering Services] business. But, the respondent authorities only after a period of 1 [one] year, had entered into another agreement with the respondent no.
The petitioner had highlighted that after the Agreement dated 06.09.2022, he had made substantial investments towards civil infrastructural works, etc. to run the Restaurant [Catering Services] business. But, the respondent authorities only after a period of 1 [one] year, had entered into another agreement with the respondent no. 4 violating the terms and conditions of the Agreement dated 06.09.2022 executed by them with the petitioner. 4. Apprehending that the terms and conditions of the Agreement dated 06.09.2022 were likely to be not adhered to by the respondent authorities, the petitioner approached this Court by instituting a writ petition, W.P.[C] no. 234/2023 seeking setting aside and quashing of the Agreement dated 13.09.2023 executed between the Department of Tourism, Government of Nagaland on one side and the respondent no. 4 on the other side. The petitioner had also sought a direction to the respondent authorities to honour the terms and conditions of the Agreement dated 06.09.2022. 5. Subsequent to the filing of the writ petition, W.P.[C] 234/2023, the petitioner could lay his hands on the Agreement dated 13.09.2023 executed between the Department of Tourism, Government of Nagaland through the Director of Tourism, Nagaland and the respondent no. 4. Immediately after filing of the writ petition, W.P.[C] no. 234/2023 on 12.10.2023, the petitioner was served with a Notice under the head, ‘Notice to vacate Restaurant at Tourism Lodge, Dimapur’ dated 15.10.2023 by the Directorate of Tourism, Nagaland. By serving the Notice dated 15.10.2023, the petitioner was asked to vacate the area of Restaurant [Catering Services] at Tourist Lodge, Dimapur within 2 [two] months from the date of issuance of the said Notice. The petitioner had been informed that the Notice had been served by invoking Clause 22 and Clause 23 of the Agreement dated 06.09.2022 in order to pave a way for the respondent no. 4 to start their ground works for the development of a 4/5 Star or Higher Category Hotel at the place of Tourist Lodge, Dimapur. 6. On being served with a Notice dated 15.10.2023, the petitioner approached this Court by way of a writ petition, W.P.[C] 252/2023. The said writ petition was, however, withdrawn on 07.11.2023 with a liberty to file afresh. After withdrawal of the writ petition, W.P.[C] no. 252/2023, the petitioner preferred the other writ petition, W.P.[C] no. 266/2023 assailing the Notice dated 15.10.2023.
On being served with a Notice dated 15.10.2023, the petitioner approached this Court by way of a writ petition, W.P.[C] 252/2023. The said writ petition was, however, withdrawn on 07.11.2023 with a liberty to file afresh. After withdrawal of the writ petition, W.P.[C] no. 252/2023, the petitioner preferred the other writ petition, W.P.[C] no. 266/2023 assailing the Notice dated 15.10.2023. The petitioner had also sought for an interim relief to the effect that till the disposal of the writ petition, the operation of the Notice dated 15.10.2023 be suspended. 7. In response to the two writ petitions, the respondent nos. 1, 2 & 3 have filed their affidavits-in-opposition in both the writ petitions. 8. As the subject-matter of both the writ petitions are inter-connected and the exchange of pleadings is complete, both the writ petitions are taken up together, as agreed by the learned counsel for the parties. 9. I have heard Mr. H.H. Kinimi, learned counsel for the petitioner and Mr. A. Zho, learned counsel for the respondent nos. 1, 2 & 3. 10. Mr. Kinimi, learned counsel for the petitioner has submitted that the petitioner had entered into a Agreement on 06.09.2022 with the respondent Tourism Department, Nagaland to operate a Restaurant [Catering Services] from the area, located at Tourist Lodge, Dimapur for a period of 5 [five] years. He has contended that the total area so given in lease to the petitioner to operate the Restaurant [Catering Services] business is 4031.92 sq. ft. After execution of the Agreement, the Restaurant [Catering Services] area was duly handed over to the petitioner. Since after the handing over of the Restaurant [Catering Services] area, the petitioner has been operating the Restaurant [Catering Services] satisfactorily by paying all the dues regularly to the respondent authorities. But the respondent authorities in the Tourism Department, Nagaland had again entered into another Lease Agreement with the respondent no. 4 for development of a 4/5 Star or Higher Category Hotel under the Public Private Partnership [PPP] mode for an initial period of 30 [thirty] years with an automatic renewal clause for a further period of 30 [thirty] years. The said Agreement was executed on 13.09.2023.
4 for development of a 4/5 Star or Higher Category Hotel under the Public Private Partnership [PPP] mode for an initial period of 30 [thirty] years with an automatic renewal clause for a further period of 30 [thirty] years. The said Agreement was executed on 13.09.2023. Subsequent to execution of the Lease Agreement dated 13.09.2023, the petitioner had been served with a impugned Notice dated 15.10.2023, whereby, the petitioner had been asked to vacate the Restaurant [Catering Services] area at the Tourist Lodge, Dimapur within a period of 2 [two] months from the date of issuance of the Notice. 10.1. Mr. Kinimi has further submitted that the petitioner after execution of the Agreement dated 06.09.2022 and after being handed over of the Restaurant [Catering Services] area, made substantial investment towards civil infrastructure, etc. works in the Restaurant [Catering Services] area. Though the period of the agreement was for 5 [five] years but the respondent authorities only after about 1 [one] year, had served the impugned Notice dated 15.10.2023 to the petitioner to vacate the Restaurant [Catering Services] area. In the event the petitioner is required to vacate the Restaurant [Catering Services] area from inside the Tourist Lodge, Dimapur, the petitioner would suffer immense loss and the investments he had made to operate the Restaurant [Catering Services] from inside the Tourist Lodge, Dimapur would not be possible to recover. He has termed the actions on the part of the respondent authorities in the Tourism Department, Nagaland as highly arbitrary and unjust. It is his contention that the State after entering into an agreement for 5 [five] years with a citizen, cannot terminate the agreement mid-way prematurely and such an act is violative of Article 14 of the Constitution of India. 11. Mr. Zho, learned counsel appearing for the respondent nos. 1, 2 & 3 has submitted that though the agreement executed between the petitioner and the Tourism Department, Government of Nagaland on 06.09.2022, is styled as Lease Deed Agreement, it is, in essence, a licence agreement only. He has drawn attention to Clause 1 and Clause 2 of the Agreement to substantiate his contention. He has submitted that in any view of the matter, the Agreement dated 06.09.2022 is determinable in nature as Clause 23 has provided for a notice period of 2 [two] months from either side for terminating the agreement.
He has drawn attention to Clause 1 and Clause 2 of the Agreement to substantiate his contention. He has submitted that in any view of the matter, the Agreement dated 06.09.2022 is determinable in nature as Clause 23 has provided for a notice period of 2 [two] months from either side for terminating the agreement. Clause 22 has further provided that the respondent Tourism Department authorities shall allow the facilities at the disposal of the State Government / Tourism Department in case of any exigency or for convenience of the State Government / Tourism Department. During the currency of the Agreement dated 06.09.2022, the respondent authorities in the Tourism Department, Government of Nagaland had entered into discussion for setting up a 4/5 Star or Higher Category Hotel at the plot of land wherein the Tourist Lodge, Dimapur is located with the respondent no. 4, which has experience of running such 4/5 Star or Higher Category Hotel at different places. After discussion, a Lease Agreement has been executed between the Tourism Department, Government of Nagaland and the respondent no. 4 for setting up a 4/5 Star or Higher Category Hotel at the landed property, belonging to the Tourism Department of the Government of Nagaland, wherein the Tourist Lodge, Dimapur is located presently, under the Public Private Partnership [PPP] on 13.09.2023. It is in view of such subsequent developments, the petitioner was asked to vacate the area of Restaurant [Catering Services] which was handed over to him to run only catering services for a period of 5 [five] years. 11.1. The petitioner was given 2 [two] months time to vacate in conformity with the terms and conditions incorporated in Clause 23 of the Agreement dated 06.09.2022. Mr. Zho has, thus, contended that there was no violation of the terms and conditions of the Agreement dated 06.09.2022. He has submitted that in any view of the matter, the Agreement dated 06.09.2022 is not a statutory contract even though the same has been entered into by the Tourism Department, Government of Nagaland as a party with the petitioner. It is further contended by him that the terms and conditions of a nonstatutory contract cannot be challenged in and enforced through a writ petition under Article 226 of the Constitution of India.
It is further contended by him that the terms and conditions of a nonstatutory contract cannot be challenged in and enforced through a writ petition under Article 226 of the Constitution of India. He has further contended that since the agreement is determinable in nature, the same cannot be enforced under the provisions of the Specific Relief Act. 12. I have given due consideration to the submissions advanced by the learned counsel for the parties and have also gone through the materials brought on record by the parties through their pleadings. 13. On a reading of the terms and conditions of the Agreement dated 06.09.2022, styled as a Lease Deed Agreement, it appears prima-facie that the same is an agreement which falls in the category of leave and licence agreement. As per Clause 1 thereof, the land and the assets namely ‘Restaurant [Catering Services]’ located inside the landed property of the Tourism Department, Government of Nagaland, that is, the Tourist Lodge, Dimapur shall remain the property of the State Government. It is clear from the Agreement dated 06.09.2022 that the landed property exclusively belong to the Government of Nagaland. Clause 2 of the Agreement has clarified that under no circumstance, the licencee shall have the right to claim the lease premises or the land whatsoever. As indicated earlier, the total area wherefrom the petitioner has been permitted to operate the Restaurant [Catering Services] business is 4031.92 sq. ft. and for allowing the petitioner to operate the Restaurant [Catering Services], the petitioner has been granted a permit at a monthly rent of Rs. 9.50 per sq. ft., that is, Rs. 38,303/-per month. 14. Clause 23 of the Agreement has provided that the lessee / licencee shall serve at least 2 [two] months’ notice in advance to the Department in case of his desire to discontinue the agreement vice versa, which means that if the Department wants the lessee, that is, the petitioner to vacate the Department asset, that is, the Restaurant [Catering Services] area then it can also serve a notice giving at least 2 [two] months’ time in advance to the petitioner to vacate. Clause 25 has further provided that in case of failure to strictly adhere to any of the terms and conditions by the lessee then the State Government shall be at liberty to cancel the agreement after serving 1 [one] month’s notice to the lessee / licencee.
Clause 25 has further provided that in case of failure to strictly adhere to any of the terms and conditions by the lessee then the State Government shall be at liberty to cancel the agreement after serving 1 [one] month’s notice to the lessee / licencee. From the aforesaid provisions of the Agreement dated 06.09.2022, it is evident that the Agreement dated 06.09.2022 is determinable in nature from either side by serving a notice at least 2 [two] months to the other side. 15. On the nature of the agreement, it is a fact that one of the parties to the Agreement dated 06.09.2022 is the Tourism Department, Government of Nagaland. At first, it is necessary to find out about the nature of the contract, that is, the Agreement dated 06.09.2022 entered into between the contesting parties herein. 16. The provisions of Article 299 of the Constitution of India require that a contract made in the exercise of the executive power of the Union or of a State must satisfy three conditions viz. [i] it must be expressed to be made by the President or by the Governor of the State, as the case may be; [ii] it must be executed on behalf of the President or the Governor, as the case may be; and [iii] its execution must be by such person and in such manner as the President or the Governor may direct or authorise. It is settled that failure to comply with these conditions nullifies the contract and renders it void and unenforceable. It has been interpreted that Article 299 of the Constitution only lays down the formality that is necessary to bind the Government with contractual liability and Article 299 does not lay down the substantial law relating to the contractual liability of the Government. In State of Haryana and others vs. Lal Chand and others, reported in [1984] 3 SCC 634, it has been held that Article 299[1] applies to a contract made in exercise of the executive power of the Union or the State, but not to a contract made in exercise of statutory power. Article 299[1] has no application to a case where a particular statutory authority as distinguished from the Union or the State enters into a contract which is statutory in nature.
Article 299[1] has no application to a case where a particular statutory authority as distinguished from the Union or the State enters into a contract which is statutory in nature. Such a contract, even though it is for securing the interest of the Union or the State, is not a contract which has been entered into by or on behalf of the Union or the State in exercise of its executive power. It has been held to be settled that contracts made in exercise of statutory powers are not covered by Article 299[1] 16.1. There are two categories of contracts – statutory contract and non-statutory contract. It is settled that even if a contract is entered into in exercise of an enabling power conferred by a statute then also the contract does not become a statutory contract. If the contract incorporates certain terms and conditions in it which are statutory then such a contract to that extent can be termed as statutory. A contract may contain certain other terms and conditions which are not of statutory character and which have been incorporated as a result of mutual agreement then such terms and conditions in the contract are to be treated of non-statutory character. After surveying a number of precedents, the Hon’ble Supreme Court of India in Joshi Technologies International Inc. vs. Union of India and others, reported in [2015] 7 SCC 728, has observed that contracts governed by the provisions of Article 299 of the Constitution of India are formal contracts made in exercise of the executive power of the Union or of a State, as the case may be. The Agreement dated 06.09.2022 which is subject-matter of dispute in this lis is undoubtedly falls in the category of non-statutory contract. Therefore, there is no doubt to the position that the Agreement dated 06.09.2022 is not a statutory contract and is a non-statutory contract. 16.2. It has been observed in Kerala State Electricity Board and another vs. Kurien E. Kalathil and others, reported in [2000] 6 SCC 293, that disputes arising out of the terms and conditions of a contract which is non-statutory in character, or alleged breaches thereof have to be settled by ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory body or public body will not by itself affect the principles to be applied.
The fact that one of the parties to the agreement is a statutory body or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body or public body need not necessarily involve an exercise of statutory power. Statutory bodies or public authorities, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. 17. In the case in hand, the agreement between the parties is in the realm of private law as by the Agreement dated 06.09.2022, the petitioner was permitted to run a Restaurant [Catering Services] from an area measuring 4031.92 sq. ft. which belongs to the Tourism Department, Government of Nagaland. Any dispute relating to interpretation of terms and conditions of such a contract which is evidently not a statutory contract, could not have been agitated in a writ petition under Article 226 of the Constitution of India, as held by Kurien E. Kalathil [supra]. It is a matter of adjudication by a civil court or arbitration, if provided for in the contract. It has been further held in Kurien E. Kalathil [supra] that whether any amount is due and if so, how much and refusal of another party to pay, it is justified or not, are not the matters which could have been agitated and decided in a writ petition. 18. On a reading of Clause 23 of the Agreement dated 06.09.2022, as mentioned hereinabove, it clearly emerges that the Agreement dated 06.09.2022 by its very nature determinable. Section 14 of the Specific Relief Act has outlined the contracts which cannot be specifically enforced. As per Clause [d] of Section 14, a contract which in its nature determinable cannot be specifically enforced. Clause [e] of Section 41 of the Specific Relief Act has contained a prescription that an injunction cannot be granted to prevent the breach of a contract the performance of which cannot be specifically enforced.
As per Clause [d] of Section 14, a contract which in its nature determinable cannot be specifically enforced. Clause [e] of Section 41 of the Specific Relief Act has contained a prescription that an injunction cannot be granted to prevent the breach of a contract the performance of which cannot be specifically enforced. Reading together the provisions of Section 14 [d] and Section 41 [e] of the Specific Relief Act, it is clear that a contract which is determinable in nature, like the one in the case in hand, which is determinable with notice of 2 [two] months from either side, the terms and conditions of the Agreement dated 06.09.2022 cannot not be specifically enforced. 19. The terms and conditions of the Agreement dated 06.09.2022 was entered into after discussion and on volition of the parties. The Agreement dated 06.09.2022 has indicated that the said agreement was entered into pursuant to a request application of the petitioner. The Notice dated 15.10.2023 which was served upon the petitioner, has provided for a period of 2 [two] months for the petitioner to vacate the area of the Restaurant [Category Services] wherefrom the petitioner was permitted to operate. The Notice dated 15.10.2023 is found in conformity with Clause 23 of the Agreement dated 06.09.2022. Even if it is a case of breach of any of the terms and conditions of the Agreement dated 06.09.2022, the relief to the petitioner cannot not be granted in the form of specific enforcement of such terms and conditions of the Agreement. Even if there is a breach of the terms and conditions of the Agreement dated 06.09.2022, it is not open for the petitioner to specifically enforce those as the only relief which is open to the petitioner is to seek damages and compensation as per the terms and conditions of the Indian Contract Act, 1872. Therefore, as regards the claim of the petitioner that he after having entered into the Agreement dated 06.09.2022, had made substantial investment to operate the Restaurant [Catering Services] and if in view of the Notice dated 15.10.2023, he would have to vacate, he would incur substantial loss, the relief sought in these two writ petitions are not permissible to be allowed. If the petitioner has a valid claim for compensation and damages in view of the Notice dated 15.10.2023, the petitioner is to approach the appropriate forum seeking reliefs. 20.
If the petitioner has a valid claim for compensation and damages in view of the Notice dated 15.10.2023, the petitioner is to approach the appropriate forum seeking reliefs. 20. In view of the discussion made above and for the reasons assigned therein, this Court does not find any merit in the two writ petitions. Subsequently, both the two writ petitions are liable to be dismissed and they are accordingly, dismissed. The interim order passed earlier stands recalled. There shall, however, be no order as to cost.