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2025 DIGILAW 1727 (RAJ)

State Of Raj. v. Bhai Shankar Lal Jawan Mal

2025-11-06

PUSHPENDRA SINGH BHATI, SANDEEP TANEJA

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Judgment : Pushpendra Singh Bhati, J. 1. These batch of special appeals arise out of a common judgment and order dated 08.10.2009 passed by the learned Single Judge of this Hon’ble Court S.B. Civil Writ Petition No. 3801/1998 (Bhai Shankar Lal Jawan Mal v. State of Rajasthan & Ors.) and other connected writ petitions, whereby the writ petitions were allowed. Since all these appeals involve identical facts and issues, they were heard together and are being decided by this common judgment for thse sake of convenience and clarity. The facts of D.B. Special Appeal (Writ) No. 326/2010 (State of Rajasthan & Ors. v. Bhai Shankar Lal Jawan Mal) are being treated as the lead case for reference. 2. The D.B. Special Appeal (Writ) No. 326/2010 (State of Rajasthan & Ors. v. Bhai Shankar Lal Jawan Mal) has been preferred seeking the following reliefs: “It is, therefore, most respectfully prayed that this appeal may kindly be allowed and the order dtd.8.10.2009 passed by the learned Single Judge be set aside and the writ petition filed by the respondent be ordered to be dismissed. Any other appropriate order or direction which may be deemed just and proper just and proper in the facts and circumstances of the case may be passed in favour of the appellants.” 3. The brief facts giving rise to the present batch of appeals are that the Krishi Upaj Mandi Samiti, Sumerpur issued an advertisement dated 18.09.1995 inviting bids for auction of plots situated in the Market Yard, Sumerpur, on lease for a period of 99 years. The respondent–writ petitioner participated in the auction held on 29.09.1995 after depositing earnest money of Rs. 10,000/-, and being the highest bidder, was allotted a shop/plot. The bid was approved by the Director, Agriculture Marketing, subject to the condition that the allottees shall furnish an undertaking to execute the lease deed in accordance with the terms and conditions approved by the State Government and to get the same registered. In compliance, the respondent submitted the undertaking, the possession of the plot was handed over, and construction was made thereon. 3.1. In compliance, the respondent submitted the undertaking, the possession of the plot was handed over, and construction was made thereon. 3.1. Subsequently, vide communication dated 21.07.1998, the respondent was directed to execute the lease deed in the proforma approved by the State Government, which incorporated a new condition for payment of annual lease money equivalent to 5% of the market value of the plot at the time of allotment, with a further condition for increase of such lease money by 25% after every fifteen years. Aggrieved by the imposition of this additional monetary obligation, the respondent filed a writ petition challenging the said communication. 3.2. The learned Single Judge, upon consideration of the record and rival submissions, found that the terms and conditions of the auction notice dated 18.09.1995 issued by the Krishi Upaj Mandi Samiti, Sumerpur, did not contain any stipulation requiring payment of annual lease money. It was held that the auction conditions were exhaustive and that no such recurring liability was contemplated at the time of auction. The subsequent communication dated 21.07.1998, directing execution of lease deeds as per the proforma approved by the State Government and incorporating a condition for payment of annual lease rent at 5% of the market value with a 25% enhancement every fifteen years, was held to be a unilateral imposition of additional pecuniary liability beyond the terms originally notified. The Court observed that the allottees, having already acted upon the auction terms and completed construction on the allotted plots, could not be compelled to bear new financial burdens, and the principle of promissory estoppel stood attracted. 3.3. Further, relying upon Section 105 of the Transfer of Property Act , 1882, the learned Single Judge held that payment of monthly or annual rent is not an essential ingredient of a lease, as transfer of leasehold rights can validly be made on payment of a one-time premium. It was, therefore, concluded that once the leasehold plots were auctioned on payment of premium, the respondents had no authority to levy additional annual rent. Consequently, the condition incorporated in the proforma lease deed regarding payment and enhancement of annual lease money was declared illegal and unsustainable, and the respondents were directed to execute the lease deeds after deleting the said condition. 4. Mr. Consequently, the condition incorporated in the proforma lease deed regarding payment and enhancement of annual lease money was declared illegal and unsustainable, and the respondents were directed to execute the lease deeds after deleting the said condition. 4. Mr. L.K. Purohit, learned counsel for the appellants submitted that the order dated 08.10.2009 passed by the learned Single Judge is contrary to the facts and law applicable to the case and deserves to be set aside. It was urged that the learned Single Judge failed to appreciate that the bid of the respondent–writ petitioner had been accepted subject to explicit conditions requiring execution of the lease deed in accordance with the terms and conditions approved by the State Government, and that the respondent had also furnished a written undertaking to this effect. Hence, once the respondent voluntarily accepted the terms and took possession of the plot, he could not subsequently challenge the validity of the conditions incorporated in the proforma lease deed. 4.1. Learned counsel further submitted that the learned Single Judge erred in holding that the condition relating to payment of annual lease money equivalent to 5% of the market value was illegal. It was argued that the said condition was neither arbitrary nor extraneous, but was introduced uniformly under the policy approved by the State Government for all Krishi Upaj Mandi Samitis. Having derived benefit of the allotment, the respondent stood estopped from disputing the terms of the lease, and the learned Single Judge failed to consider this aspect in its correct perspective. 4.2. Learned counsel for the appellants also contended that as per Condition No. 5 of the auction notice, the allottees were required to execute the lease deed in the prescribed proforma on requisite non-judicial stamp paper, and thus the incorporation of the clause regarding payment of annual lease money in the State- approved proforma could not be faulted. The condition was part of the standardized lease structure applicable to all market yard allotments and was binding on the allottees. 4.3. It was further submitted that the learned Single Judge overlooked the fact that the Mandi Samiti had earlier been allotting only constructed shops on rental basis, and that the terms for allotment of plots on leasehold basis were still under consideration at the time of auction. 4.3. It was further submitted that the learned Single Judge overlooked the fact that the Mandi Samiti had earlier been allotting only constructed shops on rental basis, and that the terms for allotment of plots on leasehold basis were still under consideration at the time of auction. Therefore, when the conditions were subsequently finalized and approved by the State Government, incorporation of the clause relating to annual lease money and its enhancement every fifteen years was a legitimate administrative action and not arbitrary in any manner. 4.4. Lastly, learned counsel urged that the learned Single Judge misapplied the provisions of Section 105 of the Transfer of Property Act , 1882, by treating payment of rent as impermissible in a lease of immovable property. It was submitted that while Section 105 does not make rent a mandatory ingredient, it equally does not prohibit imposition of annual or monthly rent as part of lease consideration. Therefore, the finding that inclusion of annual lease money was contrary to law is legally unsustainable. 5. It is to be noted that none appeared on behalf of the respondent–writ petitioner at the time of hearing of these appeals. However, for the purpose of adjudication, the stand taken by the respondent–writ petitioner in the writ proceedings has been taken into consideration. 15. The stand of the respondent–writ petitioner before the learned Single Judge was that the terms and conditions of the auction notice dated 18.09.1995 issued by the Krishi Upaj Mandi Samiti, Sumerpur, were exhaustive and did not contemplate any liability towards payment of annual lease money. It was urged that the respondents–authorities could not unilaterally impose an additional pecuniary burden after completion of the auction and allotment of plots. The writ petitioner contended that the communication dated 21.07.1998, requiring execution of lease deeds as per the State Government–approved proforma incorporating a condition for annual lease rent at 5% of the market value with 25% enhancement every fifteen years, was wholly arbitrary and dehors the original terms of the auction. It was further submitted that the petitioners, having altered their position and invested substantial amounts in construction of shops based on the initial auction terms, were entitled to the protection of the doctrine of promissory estoppel, and that the authorities were estopped from enforcing new or onerous conditions not forming part of the original auction notice. 6. It was further submitted that the petitioners, having altered their position and invested substantial amounts in construction of shops based on the initial auction terms, were entitled to the protection of the doctrine of promissory estoppel, and that the authorities were estopped from enforcing new or onerous conditions not forming part of the original auction notice. 6. Heard learned counsel for the appellant and perused the material available on record. 6.1. This Court observes that the central issue involved in these appeals pertains to the validity of the condition incorporated in the lease deed proforma approved by the State Government, requiring the allottees to pay annual lease money equivalent to 5% of the market value of the plot, with a 25% enhancement every fifteen years, which condition was introduced after the completion of the auction process. The material on record makes it evident that the auction notice dated 18.09.1995, issued by the Krishi Upaj Mandi Samiti, Sumerpur, did not contain any clause stipulating payment of annual lease rent or any recurring charge. The auction conditions were detailed and exhaustive, specifying the earnest money deposit, bid amount, and other incidental liabilities, but were silent on any further periodic payments. 6.2. This Court further finds that after the completion of the auction, the bids were duly approved by the Director, Agriculture Marketing, and the possession of the allotted plots was handed over to the allottees, who also constructed shops and commenced business thereon. The subsequent communication dated 21.07.1998, issued nearly three years later, requiring execution of lease deeds in the new proforma containing the impugned clause, clearly sought to impose an additional pecuniary burden beyond the contractual terms initially accepted. Such unilateral alteration of the conditions after finalization of the auction is impermissible in law and contrary to the settled principles governing public contracts. 6.3. This Court also finds that the undertaking furnished by the allottees to execute lease deeds in accordance with the terms approved by the State Government cannot be construed as an unqualified consent to bear any subsequent financial burden not contemplated at the time of auction. The said undertakings were given under circumstances leaving the allottees with no viable option but to comply, failing which they would have forfeited their plots. Therefore, no estoppel can be invoked against them to validate an otherwise arbitrary condition. 6.4. The said undertakings were given under circumstances leaving the allottees with no viable option but to comply, failing which they would have forfeited their plots. Therefore, no estoppel can be invoked against them to validate an otherwise arbitrary condition. 6.4. This Court further observes that the reasoning of the learned Single Judge, based on Section 105 of the Transfer of Property Act , 1882, is sound and well-founded. The said provision makes it clear that payment of monthly or annual rent is not a necessary component of a valid lease, and leasehold rights can be transferred upon payment of a one-time premium. Once the auction was conducted and the full bid amount was realized, the transfer stood complete, and no further liability could be imposed retrospectively in the guise of rent. 6.5. This Court is of the considered opinion that the learned Single Judge correctly applied the principle of promissory estoppel, holding that the respondents, having induced the petitioners to act upon the terms of the auction, could not thereafter alter the financial obligations to their detriment. The introduction of the annual lease rent condition was not only contrary to the auction notice but also unreasonable, unfair, and arbitrary, and therefore rightly quashed. 6.6. In view of the foregoing discussion, this Court finds no infirmity or illegality in the judgment dated 08.10.2009 passed by the learned Single Judge warranting interference in appellate jurisdiction. The findings are based on a correct appreciation of facts and settled legal principles, and the impugned order does not suffer from any perversity or error apparent on the face of the record. 7. Accordingly, all the Special Appeals (Writ) filed by the State of Rajasthan and its functionaries are dismissed being devoid of merit. The judgment and order dated 08.10.2009 passed by the learned Single Judge in S.B. Civil Writ Petition No. 3801/1998 (Bhai Shankar Lal Jawan Mal v. State of Rajasthan & Ors.) and other connected matters are affirmed.