COLLECTOR, DISTT. GWALIOR AND ANOTHERversusCINE EXHIBITORS P. LTD. AND ANOTHER

                         [2012] 2 S.C.R. 932


A        COLLECTOR, DISTI. GWALIOR AND ANOTHER
                                  v.
            CINE EXHIBITORS P. LTD. AND ANOTHEI~
               (Civil Appeal Nos.281-282 of 2012 )
                         JANUARY 11, 2012
B
        [DALVEER BHANDARI AND DIPAK MISRA, JJ.]

          Town Planning - Nazul land - Leased .by Gwalior
    Development Authority (GOA) in public auction - Subsequent
C   termination of the lease by lessor-GOA and lessee-first
    respondent asked to hand over possession of the land - Writ
    petition by first respondent dismissed by Single Judge of High
    Court -Division Bench of High Court, however, held that
    cancellation of the lease was unsustainable - Plea raised by
D   State that there was no transfer of the land by the State in
    favour of GOA, hence, the grant of lease by GOA in favGur of
    first respondent was ab initio void and, therefore, there was
    no right in favour of the respondent to retain possession
    rejected by Division Bench on ground that since the GOA had
E   granted lease in auction conducted with the knowledge of the
    State, the State was estopped from raising the plea that the ·
    land had not been transferred to the GOA - Held: Ncizul land,
    unless notified, does not automatically get vested in any
    authority or trust - Unless affirmative steps are takem by the
F   State Government by issuing a notification changing the
    character of the land and transferring it in favour of any
    authority, corporation or municipality, it maintains: its own
    character, i.e., nazul land - In the case at hand, nothing on
    record that the nazul land in question had ever been notified
    for transfer in favour of the GOA - GOA never became the
G   owner of the land or had the authority to deal with the land and,
    therefore, it could not have put the land to auction for any
    purpose whatsoever- First respondent cannot assert any right
    or advance any claim to remain in possession ancf run the

H                                932
     COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 933
                        P. LTD.

     cinema hall thereon and that too after cancellation of the       A
     licence for running the cinema hall, solely on the basis of a
     lease granted by its lessor-GOA, a statutory authority, which
     had no right on the land as the ownership still remained with
     the State Government - GOA could not have granted the
     lease of the property belonging to the State Government as       B
     it was Nazul land meant for the Public Works Department -
     The State Government and its functionaries are at liberty to
     proceed against the first respondent for its eviction - First
     respondent may take recourse to arbitration against the GOA
     for any other relief as entitled in law- M.P. Town Improvement   c
     Trust Act, 1960 - Chapters IV and V - Madhya Pradesh
     Nagar Tatha Gramin Adhiniyam, 1973 - ss. 38 and 87.

         Doctrines - Doctrine of Promissory Estoppel -
     Inapplicability of - Held: The doctrine/principle cannot be
     soundly embedded or treated to be sacrosanct when a public       D
     authority carries out a representation or a promise which is
     prohibited by law or is devoid of the authority of law -
     Administrative Law.

          Doctrines - Doctrine of public policy - Invocation of -     E
      Grant of lease by Gwalior Development Authority (GOA) in
     respect of properly belonging to the State Government -
-"    Challenge to - Held: The doctrine of public policy becomes
      enforceable when an action affects or offends public interest
     or where injury to the public at large is manifest - On facts,   F
     the collective interest in the property could not have been
     jeopardised by usurpation of power/authority by GOA - Such
      assumption of power by the GOA made the whole action sans
      substratum and thereby a nullity.

         The Gwalior Development Authority (GOA) had                  G
     granted· lease of land in public auction. The land in
     question was recorded as nazul land meant for the Public
     Works Department. The lease was granted to first
     respondent-company for the purpose of construction of
     a cinema hall. After execution of the lease deed, the first      H
    934    SUPREME COURT REPORTS             [2012] 2 S.C.R.


A respondent-company constructed a cinema hall and
  commenced business. However, as certain disputes
  al'ose between the Directors of the company, it was
  eventually resolved by it that the licence for running the
  cinema should be surrendered and pursuant themto, the
B Collector cancelled the licence for running the 1c:inema
  hall. After closure of the cinema hall, the less<>r-GDA
  terminated the lease and directed the first respe>ndent-
  lessee to hand over possession of the land in question.

C      The writ petition filed by the first respondent-lessee
  was dismissed by a Single Judge of the High Cc>urt on
  the ground that as there was cancellation of the licence
  of the cinema hall, the order of termination of th1e lease
  was valid and the first respondent would have an
  opportunity of hearing before steps are taken for its
D dispossession. Dissatisfied with the order, the first ·
  respondent preferred writ appeal before the Division
  Bench. The Division Bench held that 'since no ne>tice of
  termination of lease was given despite the samE1 being
  imperative and also since there was no commission of
E breach of the express conditions of the lease deed, the
  cancellation of the lease was totally unsustainable. With
  regard to taking over possession, the Division Bench
  OIPined that the authority cannot assume the juris;diction
  of taking possession without taking recourse to law. The
F plea raised by the State that there was no transfe1r of the
  land by the State in favour of the GOA, hence, the grant
  of lease by the GOA in favour of the first respondent-
  company was ab initio void and, therefore, there was no
  right in favour of the said respondent to retain the
G possession, was rejcted by th~ Division Bench on the
  ground that since the GOA had granted lease in auction
  that was conducted with the knowledge of the State, it
  was estopped from raising the plea that the land had not
  been transferred to the GOA.
H
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 935
                   P. LTD.

      The question which arose for consideration in the       A
·instant appeal was whether the Division Bench was
 justified in holding that when the GOA had granted the
 lease of the land in auction within the knowledge of the
 State, the State was estopped from raising any such
 ground that the land had not been transferred to the GOA.    B

     Allowing the appeals, the Court

    HELD: 1. It is settled in law that the doctrine of
promissory estoppel is founded on the principles of
equity and to avoid injustice. However, the said principle    C
cannot be soundly embedded or treated to be sacrosanct
when a public authority carries out a representation or a
promise which is prohibited by law or is devoid of the
authority of law. [Para 10] [944-B-C]
                                                              D .·
     Union of India and others vs. Godfrey Philips India Ltd.
AIR 1986 SC 806: 1985 (3) Suppl. SCR 123; Dr. Ashok
Kumar Maheshwari vs. State of U.P. and another AIR 1998
SC 966: 1998 (1) SCR 147; Rishabh Kumar vs. State of U.P.
AIR 1987 SC1576: 1987 Suppl. SCC 306; Mis. Sharma E
Transport vs. Government of A.P. and others AIR 2002 SC
322: 2001 (5) Suppl. SCR 390; S. Sethuraman v. R.
Venkataraman and others AIR 2007 SC 2499; Rajendra
Agricultural University vs. Ashok Kumar Prasad and others ·
(2010) 1 sec 730: 2009 (15) SCR 1168 - relied on.
                                                              F
    2.1. In the case at hand, admittedly, the land in
question is nazul land meant for the Public Works
Department. In regard to the submission made by
respondent no.1 that the land had vested with the Town
Improvement Trust, Gwalior constituted under the M.P. G
Town Improvement Trust Act, 1960 and the said vesting
continued under the Madhya Pradesh Nagar Tatha
Gramin Adhiniyam, 1973, on a closer scrutiny of the
schematic conception of the 1960 Act, especially the
provisions contained in Chapter 5 of the 1960 Act dealing H
      936   SUPREME COURT REPORTS               [2012) 2 S.C.R.


. A with the acquisition of land belonging to private persons,
    it is demonstrable that the various provisions deal with
    the acquisition and improvement of the area under the
    planned schemes. It is seemly to note that the~ type of
    improvement schemes being delineated under SEiction 31
  B of the 1960 Act are fundamentally general improvement
    schemes, re-building scheme, re-housing schemes, a
    street scheme, deferred street scheme, development
    scheme, housing accommodation schemn, town
    expansion scheme, drainage or drainage including
  C sewage disposal scheme; and playground, stadium and
    recreation ground scheme. The aforesaid has nc1thing to
    do with the land belonging to the State Government. Any
    land coming under the scheme or covered und1~r it has
    to be governed by the procedure and guidelines for
    improvement. It is a different concept altogethel'. [Paras
  0
    12, 15] [946-B-C; 949-C-F]
         2.2. The lands belonging to the State Government are
    dealt with in the Revenue Book Circular and na2:ul lands
    are specifically adverted to in Part IV of the said Circular.
E ~t deals with management and disposal of nazul lands
    within the limits of Municipal Corporation, municipal
    towns and notified areas. The Revenue Book Circular
    also stipulates that the classification of land is done at
    the time of settlement. The Collector of the district has
F been bestowed with the power to make alterations in the
    settlement classifications on the ground t.hat they have
    been incorrectly made or that the purpose for which the
    land was used had changed in the settlement. In such
    1ype of cases, 'Abadi' lands are recorded as nazul lands
G and, accordingly, the vacant spaces are administered as
    nazul lands. The aforesaid schematic concept mad with
    the language employed in the 1960 Act and the 11973 Act
    would clearly reveal that nazul land, unless notifo!d, does
    not automatically get vested in any authority or trust. The
H · State Government, from time to time, has be~n issuing




 .•
 COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 937
                    P. LTD.
  notifications to the effect of vesting or transferring of   A
  nazul land to be part of improvement trust and giving
  advance possession to the Town Improvement Trust.
. That apart, the State Government has issued notifications
  framing guidelines for distribution of the Nazul plots.
  [Paras 18, 19] [954-A-B; 956-F-H; 957-A-B]                  B

      2.3. Unless affirmative steps are taken by the State
 Government by .issuing a notification changing the
 character of the land and transferring it in favour of any
 authority, corporation or municipality, it maintains its own C
 character, i.e., nazul land. In the case at hand, the land is
 recorded as nazul land for the Public Works Department.
 Nothing has been brought on record that it had ever
 been notified for transfer in favour of the GOA. Thus
 analysed, the GOA never became the owner of the land
 or had the authority to deal with the land and, therefore, D
 it could not have put the land to auction for any purpose
 whatsoever. Ergo, the first respondent cannot assert any
 right or advance any claim to remain in possession and
 run the cinema hall and that too after cancellation of the
 licence, solely on the basis of a lease granted by its E
 lessor, a statutory authority, who had no right on the land
 for the simon pure reason that the ownership still
 remained with the State Government. When no right lies
 with the GOA in respect of the land in view of the
 conditions precedent as stipulated in the Revenue Book F
 Circular not having been satisfied and the nature of the
 land has remained in a sustained state, no legal sanctity
 can be attached to the lease executed by it in favour of
 the 1st respondent. The grant is fundamentally ultra vires
 and hence, the respondent-company has to meet its G
 Waterloo. [Para 21) (957-E-H; 958-A-B]

     Akhil Bhartiya Upbhokta Congress vs, State of Madhya
 Pradesh and Ors AIR 2011 SC 1834 - relied on.

     3. Quite apart from the above, it is condign to note     H
    938         SUPREME COURT REPORTS            [2012] 2 S.C.R.


A that in a case of the present nature, the comm<>n law
  doctrine of public policy can be invoked. Tht:! said
  doctrine becomes enforceable when an action affocts or
  offends public interest or where injury to the public at
  lal"ge is manifest. As is perceptible, the GOA could not
B have granted the lease of the property belonging to the
  State Government as it was Nazul land meant for the
  Public Works Department. The collective interest in the
  property could not have been jeopardised by usurpation
  of power/authority by the GOA. Such assumption of
c power by the GOA makes the whole action sans
  substratum and thereby a nullity. Needless to say, any
  grant has to have legal sanctity and legitimacy. [Para 22]
  [958-C-E]

     , 4. The State Government and its functionaries are at
D liberty to proceed against the first respondent for its
  eviction. It is open to the first respondent to take rec:ourse
  to the arbitration clause against the GOA for any other
  relief as advised in law. [Para 23] [958-F-G]

E                          Case Law Reference:
             1985 (3) Suppl. SCR 123 relied on        Para 10
             1998 (1) SCR 147        relied on        Para 11
             1987 suppl. sec 306     relied on        Para 11
F
             2001 (5) Suppl. SCR 390 relied on        Para 11
             AIR 2007 SC 2499        relied on        Para 11
         1   2009 (15) SCR 1168      relied on        Para 11
G    '       AIR 2011 SC 1834        relied on        Para 20
        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 281-
    282 of 2012.

H        · From the Judgment & Order dated 28.03.2008 in Writ
 COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 939
                    P. LTD. .

 Appeal No. 234 of 2007 and order dated 22.09.2010 of the          A
 High Court of Madhya Pradesh, Bench at Gwalior in Review
 Petition No. 83 of 2010.

      B.S. Banthia, Vikas Upadhyay for the Appellants.

     Dhruv Mehta, Divyakant Lahoti, Sameer Abhyankar, R.K.         B
 Agarwal, Veena Minocha, Arvind Minocha, Randhir Singh, Niraj
 Sharma, Neeraj Srivastav for the Respondents.

      The Judgment of the Court was del.ivered by

      DIPAK MISRA, J. 1. Special leave granted in both the
                                                                   c
 petitions.

        2. In these two appeals, the defensibility and legal
  pregnability of the judgment and order dated 28th March, 2010
  passed by the Division Bench of High Court of Judicature of D
  Madhya Pradesh, Jabalpur, Bench at Gwalior in Writ Appeal
· No. 234 of 2007 and the order dated 22nd September, 2010
  in R.P. No. 83 of 2010 whereby the Division Bench has
  dislodged the order passed by the learned Single Judge in Writ
  Petition No. 1718 of 2002 wherein the writ court had declined E
  to interfere with the order dated 9.8.2002 passed by the Chief . ·
  Executive Officer, Gwalior Development Authority (for short " the
  GOA"), who, by the said order, had terminated the lease of the
  first respondent herein and directed it to surrender the
  possession of the property within seven days, failing which ·F
  appropriate action to be taken against it in accordance with law,
  is called in question.

      3. The succinct expose' of facts are that the GOA issued
 an advertisement for allotment of plot No. 1 admeasuring 40160    G
 sq. feet situated in the locality known as Mayur Market for the
 purpose of construction of a cinema house and, in the public
 auction, the respondent-company, the first respondent herein,
 became the highest bidder and accordingly, a lease agreement
 was executed on 27 .5.1978 between the GOA and the
 respondent company. The said lease agreement was for a            H
    940     SUPREME COURT REPORTS                  [2012:] 2 S.C.R.


A period of thirty years with the stipulation of a right of renewal
  subject to certain conditions. It was asserted in the writ petition
  that after execution of the lease deed, the respondent company
  constructed a cinema hall and commenced the business. As
  certain disputes arose between the directors of thE3 company,
B it was eventually resolved that the licence for running the cinema
  should be surrendered and in consonance with the1 resolution,
  a letter was issued to the Collector concerned, who cancelled
  the licence for running the cinema hall. After closure of the
  cinema hall, the GOA, by communication dated 2.8.2002,
c terminated the lease and directed for handing over possession
  of the land in question.

        4. It was contended before the learned Single! Judge that
   the notice for cancellation of lease was not serve!d on it and
   the allegations that there had been violation of th13 terms and
D conditions of the agreement were absolutely unsustainable and,
   therefore, the eventual act of termination was sensitively
  susceptible. It was also urged that as permission was granted
  for raising permanent construction, the lease had the character
  of a permanent lease and could not have been terminated by
E the GOA. The GOA combated the aforesaid stand put forth by
  the respondent-company and countered the same by
  contending, inter alia, that there had been violation of the terms
  and conditions of the agreement; that the stance of putting the
  lease on the pedestal of a permanent lease was sans
F substance; that the plea that the notice for cancellation of lease
  was not served was contrary to the documents brought on
  record; that reminders were served on the respondent-
  company; that the lease was granted for a specific purpose and
  when the said purpose had totally melted into extinction, it was
G within the legal province bf the GOA to cancel the lease and
  take appropriate steps for eviction.
       5. The learned Single Judge took note of the
  proponements canvassed by the learned counsel for the parties
  and posed the question whether the GOA had the right to
H terminate the lease of the petitioner and, thereafter, scanning
COLLECTOR, OISTT. GWALIOR v. CINE EXHIBITORS 941
          P. LTD. [DIPAK MISRA, J.]

the terms and conditions of the lease deed, expressed the view A
that as there has been cancellation of the licence of the cinema
hall, the order of termination of the lease was valid and the
petitioner would have an opportunity of hearing before steps
are taken for its dispossession. Being of this view, he
dismissed the writ petition. Be it noted, a contention was raised B
before the learned Single Judge that the land in question is
owned by the State but the same was granted on lease by the
GOA, which is absolutely impermissible, however, the learned
Single Judge did not think it appropriate to dwell upon the same
on the foundation that the said question will be decided when       c
the State Government takes any action against the petitioner
by the respondent GOA.

     6. Being dissatisfied with the aforesaid order, the first
respondent preferred a writ appeal and the Division Bench in
the intra-court appeal expressed the opinion that no notice of D
termination of lease was given despite the same being
imperative and secondly, there was no commission of breach
of the express conditions of the lease deed and hence, the
cancellation was totally unsustainable. With regard to taking
over possession, the Division Bench opined that the authority E
cannot assume the jurisdiction of taking possession without
taking recourse to law. It is apt to note that on behalf of the State,
a stand was vigorously canvassed that when there has been
no transfer of the .land by the State in favour of the GOA, the
grant of lease by the GOA in favour of the first respondent- F
company is ab initio void and, therefore, no right flows in favour
of the said respondent to retain the possession. The learned
Judges repelled the said stand on the base that when the GOA
had granted lease in the auction that was conducted with the
knowledge of the State, it is estopped from raising the plea that G
the land had not been transferred to the GOA. Expressing this
view, the appeal was dismissed in the ultimate eventuality.

    7. Mr. B.S. Banthia, learned counsel appearing for the
appellants, questioning the sustainability of the impugned          H
orders, has raised the following contentions: -
    942          SUPREME COURT REPORTS                  [2012] 2 S.C.R.


A          (a)     When an issue was raised before the High Court
                   that the State had not transferred the land in favour
                   of the GOA and, therefore, the GDA had no
                   authority to deal with the land in any manner
                   whatsoever, the said facet should have been dealt
8                  with in proper perspective and not brushed aside
                   on the ground of estoppel.

           (b)     The concept of promissory estoppel doe's not have
                   any play when no competent authority of the
                   Government had transferred the land in favour of the
c                  GOA as per the requisite procedure and as a
                   sequitur, any step taken by the GOA even in the
                   presence of an officer will not debar the State to
                   raise the plea as regards its right, title and interest
                   within the period of limitation.
0
           (c)     The grant of lease being per se wholly vulnerable;
                   the basic infrastructure collapses and once the
                   infrastructure is foundered, the super s1tructure is
                   bound to be razed to the ground. To put it differently,
E                  when the GOA had no right to lease the land in·.
                   question, the respondent-company cannot claim a
                   better right as a lessee than that of a le~;sor.

           (d)     It has become a common phenomenoin to grab
                   public property by adopting maladroit methodology
F                  and, therefore, the Division Bench should not have
                   scuttled the right of the State and its authorities on
                   the ground of estoppel which, in fact, does not arise
                   remotely.

G          (e)     The GOA has unequivocally admitted b1~fore this
                   Court that the land in question was not transferred
                   in its favour. The action taken by the State
                   Government should be given the stamp of approval.

          8. Mr. Ohruv Mehta, learned senior counsel appe!aring for
H
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 943
          P. LTD. [DIPAK MISRA, J.]

the respondent No. 1, countering the aforesaid submissions, A
submitted that the approach of the High Court in the writ appeal
cannot be found fault with inasmuch as the scope of the writ
petition out of which the writ appeal emerged was limited, i.e.,
whether the lease could be cancelled by the GOA. It is
canvassed by him that there may be a cavil between the GOA B
and the State Government but by any stretch of imagination,
the same cannot create any kind. of concavity or dent in the right
of the first respondent to enjoy the benefit of the lease. It is his
further submission that when the State Government has become
totally oblivious of its right, if any, it cannot rise like a phoenixc
and put forth its claim to the property. It is highlighted by him
that under the M.P. Town Improvement Trust Act, 1960 (for short
"the 1960 Act"), and Madhya Pradesh Nagar Tatha Gramin
Adhiniyam, 1973 (for brevity "the 1973 Act") the schemes having
come into existence, the property had vested in the GOA and, 0
therefore, the State Government has no right to interfere and
in that backdrop, the finding recorded in the intra-court appeal
that there has been lack of notice prior to the cancellation of
the lease and further no violation of any of the postulates of the
lease agreement cannot be flawed.
                                                                      E
     9. Mr. Neeraj Sharma, learned counsel appearing for. the
2nd respondent, the GOA, contended that the land was
recorded as 'Nazul' meant for the Public Works Department
and was never transferred to the GOA and in that background,
the question of estoppel or acquiescence by the State F
Government does not arise. In fact, submits the learned counsel,
by a total mistaken impression, the land was put to auction and
the lease deed was executed in favour of the first respondent.
Additionally, it is propounded by him that if any dispute has
arisen, there is an arbitration clause which would enable the G
respondent- company to agitate its grievances barring eviction
especially when the grant of lease is a void one.

     10. The seminal issue that emanates for consideration is
whether the Division Bench is justified in stating in a sweeping     H
    944       SUPREME COURT REPORTS                    [2012] 2 S.C.R.


A manner that when the GOA had granted the lease of the land
  in auction within the knowledge of the State, the State is
  estopped from raising any such ground that the land had not
  been transferred to the GOA after lapse of thirty years. It is not
  disputed before us that the first respondent had not perlected
B its right, title and interest by way of adverse possession as it
  could not have been. Evidently, the High Court has proc:eeded
  on the basis of the doctrine of promissory estoppel. It is settled
  in law that the said doctrine is founded on the principles of
  equity and to avoid injustice. The said principle cannot be
c soun~ly embedded or treated to be sacrosanct when a public
  authority carries out a representation or a promise wlhich is
  prohibited by law or is devoid of the authority of law. In Union
  of India and others vs. Godfrey Philips India Ltd., 1 a1 three
  Judge Bench of this Court has crystallised the principle thus:-
0         ".... that there can be no promissory estoppel against the.
          legislatur~ in the exercise of its legislative functions nor can
          the Government or public authority be debarred by
          promissory estoppel from enforcing a statutory prohibition.
          It is equally true that promissory estoppel cannot b1~ used
E         to compel the Government or a public authority to ca1rry out
          a representation or promise which is contrary to law or
          which was outside the authority or power of the officer of
          the Government or of the public authority to make"

F        11. In Dr. Ashok Kumar Maheshwari vs . State of U.P. and
    another, a two-Judge Bench of this Court, after referring1 to the
    dec:ision in Rishabh Kumar vs. State of U.P. 3 , proceeded to
    state as follows: -
          "21. This principle was reiterated in Union of India 11. R.C.
G         D'Souza AIR 1987 SC 1172 : (1987) 2 SCC 211, where
          a retired army officer was recruited as Assistant
    1.   AIR 1986 SC 806.
    2.   AIR 1998 SC 966.
H   3.   AIR 1987 SC 1576.
 COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 945
           P. LTD. [DIPAK MISRA, J.]

      Commandant on temporary basis and was called upon to           A
      exercise his option for regularisation contrary to the
      statutory rules. It was held that it would not amount to
      estoppel against the Department.

     22. Whether a Promissory Estoppel, which is based on a B
      'promise' contrary to law can be invoked has already been
      considered by this Court in Kasinka Trading v. Union of
      India, (1995) 1 SCC 274 : (1995 AIR SCW 680) as also
      in Shabi Construction Co. Ltd. v. City & Industrial
      Development Corporation (1995) 4 SCC 301 wherein it C
      is laid down that the Rules of "Promissory Estoppel"
      cannot be invoked for the enforcement of a 'promise' or a
      'declaration' which is contrary to law or outside the authority
      or power of the Government or the person making that
      promise."
                                                                      D
In this context, we may profitably refer to the decision of this
Court in Mis. Sharma Transport vs. Government of A.P. and
others" , wherein a three-Judge Bench opined that it is equally
settled law that promissory estoppel cannot be used compelling
the Government or a public authority to carry out a E
representation or promise which is prohibited by law or which
is devoid of the authority or power of the officer of the
Government orthe public authority to make. In this regard, we
may also usefully refer to the observations made in S.
Sethuraman vs. R. Venkataraman and others5 which is to the F
effect that if jurisdiction cannot be conferred by consent, it
cannot clothe the authority to exercise the same in an illegal
manner. Recently, in Rajendra Agricultural University vs.
Ashok Kumar Prasad and others, 6 it has been laid down that
non-compliance with the mandatory statutory requirement will G
make the act invalid and cannot be regarded as a
representation held. out by the Government creating any right
4.   AIR 2002 SC 322.
5.   AIR 2007 SC 2499.
a.   c2010) 1 sec 130                                                H
    946      SUPREME COURT REPORTS                  [2012) 2 S.C.R.

A   to seek the benefit by inviting the doctrine of promissory
    estoppel against the government.

          12. In the case at hand, admittedly, the land is nazul land
  meant for the Public Works Department. It had been urged
  before the High Court that the land in question was not
8
  transferred in favour of the GOA. The submission of Mr. Mehta,
  learned senior counsel for the respondent No. 1, is tha1t the land
  had vested with the Town Improvement Trust, Gwalior
  constituted under the 1960 Act and the said vesting continued
C under the 1973 Act. To appreciate the said submission, we
  may analyse the scheme of the 1960 Act. The saidl Act was
  enacted to consolidate and amend the law relating to the
  establishment of improvement trust for the purpose of making
  and executing town improvement scheme in certain towns of
  Madhya Pradesh. Chapter II of the Act deals with the
D Constitution of the Trust. Chapter Ill provides for conduct of
  business. Chapter IV deals with improvement schemes.
  Various schemes are being enumerated under various
  provisions in the said chapter. Section 52 which occurs in
  Chapter IV provides for issuance of notification of sainction of
E improvement schemes and order regarding vesting a property
  in the Trust. The said provision being relevant is reproduced
  below: -

          "52. Notification of sanction of improvement scheme and
F         order regarding vesting of property in the Trust. - (1)
          Whenever the State Government sanctions an
          improvement scheme, it -

                 (a)   shall announce the fact by notificaition and
                       except in the case of a deferred street
G                      scheme, development scheme, or town
                       expansion scheme, the Trust shall forthwith
                       proceed to execute the same; and

                 (b)   may order that any street, square, park, open
H                      space or other land, or any other part thereof,
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 947
          P. LTD. [DIPAK MISRA, J.]

                  which is the property of the Government and        A
                  managed by the Central Government or the
                  State Government shall, subject to such
                  condition as it may impose, vest in the Trust
                  for the purpose of the scheme.
                                                                     B
    (2) The publication of a notification under sub-section (1)
    in respect of any scheme shall be conclusive evidence that
    the scheme has been duly framed and sanctioned."

On scanning of the aforesaid provision, it is luminous that sub-
section (2) of Section 52 postulates that publication of a           C
notification under sub-section (1) in respect of any scheme shall
be conclusive evidence that the scheme has been duly framed
and sanctioned.

     13. Chapter V of the Act deals with acquisition and             D
disposal of land. Section 67 empowers the Trust to acquire by
purchase, lease or exchange any land within the area
comprised in a sanctioned scheme for many persons under an
agreement with such person. Section 68 provides for notice of
acquisition of land. As the learned senior counsel for the           E
respondent has placed heavy reliance on the said provision,
the same is reproduced below :-

   . "68. Notice acquisition of land- (1) If in the opinion of the
     Trust any land is required for the purposes of any scheme
     sanctioned by the State Government under Section 51, the        F
     Trust shall by a notice published in the Gazette and in such
     other manner may be prescribed, signify its intention to
     acquire such land. Such notice shall specify the place
     where and the hours during with the maps and
     specifications of the land proposed to be acquired may          G
     be inspected.

    (2) The owner of the land which has been notified under
    sub-section (1) or any other person interested therein may
    object to the acquisition of such land within 80 days after      H
    948       SUPREME COURT REPORTS                  [2012) 2 S.C.R.


A         the publication of the notice in the Gazette.

          (3) Every objection under sub-section (2) shall be made
          to the Trust in writing and the Trust shall give the objector
          an opportunity of bejng heard in person or by a duly
          authorised agent or pleader and shall after hearing all such
B
          objections and making such further inquiry, if may, as may
          be necessary," take such decision as it may deem fit."

  On a plain reading of the aforesaid provision, it is clear a:s noon
  day that if in the opinion of the Trust any land is required for
C the purpose of any scheme sanctioned by the State Government
  under Section 51, the Trust shall by notice published in the
  Gazette and by any such other manner as may be prescribed,
  signify its intention to acquire such land. Such notice, as
  stipulated therein, shall specify the place etc. The rest of the
D provision is, in a way, procedural in nature. Section 69 makes
  a provision whereunder the Trust may apply to the State
  Government for sanction to acquire the land. Sectiion 70
  provides for procedure for sanction of acquisition. Secltion 71
  provides for notification of acquisition and vesting of land in the
E Trust.

        14. Mr. Mehta has drawn immense inspiration from Section
    71 which is as follows:-

        "71. Notification of acquisition and vesting of land in
F       Trust - (1) After the acquisition of land is sanctioned by
        the State Government under Section 70 the Tru:st may
        acquire such land by publishing in the Gazette a notice
        stating that it had decided to acquire the land and has
        obtained the sanction of the State Government for the
G       acquisition thereof.
        (2) When a notice under sub-section (1) is published in the
        Gazette the land shall, on and from the date c1f such
        publication, vest absolutely in the Trust free from all
        encumbrance.
H
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 949
          P. LTD. [DIPAK MISRA, J.]

    (3) Where any land is vested in the Trust under sub-section         A
    (2), the Trust may by notice in writing , order any person
    who may be in possession of the land to surrender or
    deliver possession thereof to the Trust or any person duly
    authorised by it in this behalf within thirty days of the service
    of the notice.                                                      B

     (4) If any person refuses or fails to comply with an order
     made under sub-section (3), the Trust may take
     possession of the land and may for that purpose cause to
     be sued such force as may be necessary."
                                                                        c
      15. On a closer scrutiny of the schematic conception of the
Act, especially the provisions contained in Chapter 5 of the
1960 Act dealing with the acquisition of land belonging to
private persons, it is demonstrable that the various provisions
deal with the acquisition and improvement of ttie area under            o
the planned schemes. It is seemly to note that the type of
improvement schemes being delineated under Section 31 of
the 1960 Act are fundamentally general improvement schemes,
re-building scheme, re-housing schemes, a street scheme,
deferred street scheme, development scheme, housing                     E
accommodation scheme, town expansion scheme, drainage or
drainage including sewage disposal scheme; and playground,
stadium and recreation ground scheme. The aforesaid has
nothing to do with the land belonging to the State Government.
Any land coming under the scheme or covered under it has to
                                                                        F
be governed by the procedure and guidelines for improvement.
It is a different concept altogether.

     16. We will be failing in our duty if we do not refer to certain
provisions, namely, Sections 38 and 87 of the 1973 Act as our
attention has been drawn by Mr. Mehta, learned counsel for the          G
respondent No. 1. They read as follows:

     "38. Establishment of Town and Country Development
     Authority. - (1) The State Government may, by notification,
     establish a Town and Country Development Authority by              H
    950       SUPREME COURT REPORTS                   [2012] 2 S.C.R.


A     . such name and for such area as may be specified in the
        notification.

                 (2) The duty of implementing the proposal in the
          development plan, preparing one or more town
          development schemes and acquisition and development
B         of land for the purpose of expansion or improvement of the
          area specified in the notification under sub-section (1)
          shall, subject to the provision of this Act vest in the! Town
          and Country Development Authority established for the said
          area.
c
    ' 1         Provided that the duty imposed on the Town and
          Country Development Authority shall, till that authority is
          established for any area under sub-section (1 ), be
          performed by the local authority having jurisdiction over
D         such area as if it were a Town and Country Development
          Authority established under this Act.

                (3) On the establishment of the Town and Country
          Development Authority for the area to which the proviso
          to sub-section (2) applies, the following consequences
E         shall ensue in relation to that area, namely : -

                (i) all assets and liabilities acquired and incurred by
          the local authority in the discharge of the duty under the
          proviso to sub-section (2) shall belong to and be clemand
F         to be the assets and liabilities of the Town and Country
          Development Authority established in place of such local
          authority;

                (ii) all records and papers belonging to the local
          authority referred to in clause (i) shall vest in and be
G
          transferred to the Town' and Country Development Authority
          established in its place.

                xxx xxx xxx xxx
H         87. Repeal, Savings and construction of references. (1)
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 951
          P. LTD. [DIPAK MISRA, J.]

   As from the date of, -                                            A

    (a}    the coming into force of the provisions ofChapter
           II the reference to ChiefTownPlanner in      any
           enactment for the timebeing in force, shall be
           construed as areference to the Director;                  B

    (b}.   the Constitution of a planning area, the following
           consequences shall ensue.namely -

           (i) The Madhya Pradesh Town PlanningAct, 1948
           (No. 17 of 1948), shall standrepealed in such C
           area;

           (ii) any land use map, draft development or
           development plan prepared under the said Act,
           shall be deemed to have beenprepared under this
                                                           0
           Act and all papersrelating thereto shall stand
           transferred tothe Director;

    (C)    the establishment of the Town and Country
           Development Authority for any area the following
           consequences shall ensue in relation to that, area,       E
           namely-

   (i) the Madhya Pradesh Town Improvement Trust Act, 1960
   (No. 14 of 1961 ), shall stand repealed in its application to
   the said area,                                                    F

   (ii) the Town Improvement Trust functioning within the
   jurisdiction of the Town and Country Development Authority
   so established shall stand dissolved and any Town
   Improvement Scheme prepared under the said Act, shall
   in so far as it is not inconsistent with the provisions of this G
   Act be deemed to have been prepared under this Act,

   (iii) all assets and liabilities of the Town Improvement Trusts
   shall belong to and be deemed to be the assets and
   liabilities of the Town and Country Development Authority         H
    952          SUPREME COURT REPORTS                [2012]1 2 S.C.R.

A         established in place of such Town Improvement Trust under
          Section 38;

          iii-a) grants and contributions payable to the Town
          Improvement Trust shall continue to be payable to the Town
B         and Country Development Authority establishe!d in place
          of such Town Improvement Trust under Section 38;

          (iv) all employees belonging to or under the control of the
          Town Improvement Trust referred to in sub-clause (ii)
          immediately before the date aforesaid shall be deemed
c         to be the employees of the Town and Country Development
          Authority established for such area under SecUon 38;

                Provided that the terms and conditions oif service of
          such employees shall be the same until altered by the Town
D         and Country Development Authority with th1:1 previous
          sanction of the State Government :

                Provided further that no sanction under the foregoing
          proviso shall be accorded by the State Govemment until
          the person affected thereby is given a n~asonable
E         opportunity of being heard;               ·

           (v)    all records and papers belonging to the Town
                  Improvement Trusts referred to in sub-clause (ii)
                  shall vest in and be transferred to the! Town and
F                 Country Development Authority established in its
                  place under Section 38.

           (2)    Notwithstanding the repeal of the Madhya Pradesh
                  Town Improvement Trusts Act, 1960 (No. 14 of
                  1961) (hereinafterreferred to as the repealed Act),
G                 undersub-clause (i) of clause (c) of sub..section (1),


                  (a) all cases relating to compensation in respect of
                  acquisition and vesting of land in the Town
H                 Improvement Trust under Section 71 of the
COLLECTOR, DISTI. GWALIOR v. CINE EXHIBITORS 953
          P. LTD. [DIPAK MISRA, J.]

            repealed Act and pending before the Town                 A
            Improvement Trust or the Tribunal or the Court of the
            District Judge or the High Courti m m e d i a t e I y
            before the date of such repeal shall be dealt with
            and disposed of by -
                                                                     B
            (i) the Town and Country Development Authority
            established in place of such Town Improvement
            Trust under Section 38;

            (ii) the Tribunal to be constituted under Section 73
            of the repealed Act after the commencement of the        C
            Madhya Pradesh Nagar Tatha Gram Nivesh
            (Sanshodhan) Adhiniyam, 1979;

            (iii) the Court of the District Judge;
                                                                     D
            (iv) the High Court;

            As the case may be, in accordance with the
            provisions of the repealed Act, as if this Act had not
            been passed;
                                                                     E
            (b) the Town and Country Development Authority,
            the Tribunal, the Court of the District Judge or the
            High Court, as the case may be, may proceed to
            deal withand disposed of the same from the stage
            at which such cases were left over at the time of
                                                                     F
            repeal."

     17. If we have correctly understood the submission of Mr.
Mehta, learned senior counsel, he has placed reliance on the
said provisions solely for the purpose that the right created in
favour of the GOA remained unaffected and, in fact, was              G
protected under the 1973 Act. There is no cavil over the said
proposition of law. But, a pregnant one, the crux of the matter
is whether the land that was recorded as Nazul land meant for
the Public Works Department got transferred to the GOA so
that its right got concretized.                                      H
    954:            SUPREME COURT REPORTS               [2012] 2 S.C.R


A     · 18. It is apt to note that the lands belonging to the Stci!-:
  Government are dealt with in the Revenue Book Circular and
  nazul lands are specifically adverted to in Part IV of thei said
  Circular. It deals with management and disposal of nazul lands
  within the limits of Municipal Corporation, municipal towns and
B notified areas. Under the heading 'What is Nazul', it has been
  stated thus: -
      .:;.
             "'Nazul' and 'Milkiyat Sarkar' Land which is the pmperty
             of Government and which -
c             (a) . is not included in a holding in a village;
      a-t
              (b)     is not recorded as Banjar, scrub jungle, hi111; and
                      rocks, rivers, village-forest or Government-forest;

              (c)     is not recorded as village roads, Gothan, grazing
D
                      land Abadi and pastures;

      r ' (d)         is not reserved for any communal purpose for the
      1,-             Nistar of the village; and

E             (e)     is not service land;
      'I
      ;'·falls under two classes viz. "Nazul" and "Milkiyat Sarkar''.
      t Nazul includes such Government land as is used either for
      ·. , building purposes or purposes of public convenience such
      : as markets, or recreation grounds or which is likely to be
F          used for such purposes in future.

            , Government land in the occupation or on the books,
         of a department of the State Government or of the Oentral
         Government are not to be excluded from the classifiGation
G        and will be recorded as "Nazul" or "Milkiyat Sarkar", as the
       . case may be. In brief, it may be stated that "Nazul" is that
      ," land which has a site value as opposed to an agricultural
      ;1 value."

      ' Clause 12 of Section IV provides how nazul land can be
H       disposed of. It reads as follows: -
COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 955
          P. LTD. [DIPAK MISRA, J.]

    "12. Nazul land can be disposed of in the following ways:-    A

    (1)    by permanent lease;

    (2)    by temporary lease;

    (3)    on no-claim agreement;                                 B

    (4)    on annual licence; and

    (5) transfer in favour of a department of the State
    Government or other State Governments or the
    Government of India and vesting in favour of a local body." C

Clause 13 deals with the manner in which permanent leases
are granted and Clause 14 deals with reservation of special
plots. For the sake of completeness, both the Clauses are
reproduced below: -                                               o
    "13. Permanent leases - (i) Permanent leases are
    granted either through auction or without auction.

    (ii) Permanent lease may be granted without auction in
    the following cases: -                                        E

     (1)    When the land in question is adjacent to the land
            of the applicant and will not be of any use to any
            person other thary the applicant.

     (2)   When it is decided to condone the encroachment         F
           of an encroacherand to grant the encroached area
           to the encroacher on permanent lease.

     (3)   .When the land in question will be used for religious
            charitable, educational, co-operative, public or G
            social purposes.

     (4)   Plots given to very poor persons in a locality where
           only poor persons live.
                                                                  H
    956       SUPREME COURT REPORTS                  [2012] 2 S.C.R.


A          (5)   Any other land for which there are adequate n~asons
                 for foregoing auction, e.g., land required by the
                 Madhya Pradesh Electricity Board, State Road
                 Transport Corporation, etc.

          14. Reservation of special plots. - At regular settlement
B
          all Government plots or sites which are likely to be valuable
          for any special reason, such as their situation nea1r a line
          of railway or the like, or which in any scheme of
          development have been set aside as specially valuable or
          as being required for a public purpose are marked of by
c         the Settlement Officer in consultation with the Collector as
          reserved and the disposal of all such plots will be subject
          to the sanction of the State Government upon such :special
          terms as may be decided for each plot.

D               All land within a radius of 100 yards of a railway_
          station and all land within 40 yards of a railway station
          boundary should be reserved.

                There will necessarily be exceptions such as for
          instance where there is a lay out already sanctioned by
E
          Government the Collector will maintain a list of these plots
          and with the approval of the State Government will alter it
          as the changing circumstances of the town may demand."

       19. The Revenue Book Circular also stipulates that the
F classification of land is done at the time of settlement. The
  Collector of the district has been bestowed with the pc1wer to
  make alterations in the settlement classifications on the ground
  that they have been incorrectly made or that the purpose for
  which the land was used had changed in the settlement. lln such
G type of cases, 'Abadi' lands <;ire recorded as nazul lands and,
  accordingly, the vacant spaces are administered as nazul
                    1
  lands. The aforesc;iid schematic concept read with the language
  employed in the 1960 Act and the 1973 Act would clearly reveal
  that nazlil land, unless notified, does not automatically get
H vested in any authority or trust. The State Government, from time
  COLLECTOR, DISTT. GWALIOR v. CINE EXHIBITORS 957
            P. LTD. [DIPAK MISRA, J.]
 to time, has been issuing notifications to the effect of vesting        A
 or transferring of nazul land to be part of improvement trust and
 giving advance possession to the Town Improvement Trust. That
 apart, the State Government has issued notifications framing
 guidelines for distribution of the Nazul plots.
                                                                         B
      20. It is not out of place to mention here that this Court in
 Akhil Bhartiya Upbhokta Congress vs. State of Madhya
 Pradesh and Ors. 7 had not approved the manner in which the
 State Government had granted the land belonging to the State
 in favour of the appellant therein. After referring to the Revenue      C
 Book Circular, this Court decried the action of the State
 Authorities in allotment of Nazul land without following the criteria
 and by treating it as State largesse wherein the public has an
 interest. After the said decision was rendered on 06.04.2011,
 the State of Madhya Pradesh, Department of Revenue, has
 issued Circular No. 6-53/2011-Nazul dated 8.8.2011 describing           D
 certain guidelines in the distribution of Nazul land. In the said
 circular, it has been stated that the said circular shall be treated
 as a part of Section 1 of th~ Revenue Book Circular.

        21. We have referred to these aspects singularly to E ·
  highlight that unless affirmative steps are taken by the State
  Government by issuing a notification changing the character of
  the land and transferring it in favour of any authority, corporation
  or municipality, it maintains its own character, i.e., nazul land.
  In the case at hand, the land ·is recorded as nazul land for the F
  Public Works Department. Nothing has been brought on record
  that it had ever been notified for transfer in favour of the GOA.
  Thus analysed, the GOA never became the owner of the land
  or had the authority to deal with the land and, therefore, it could
  not have put the land to auction for any purpose whatsoever. G
  Ergo, the first respondent cannot assert any right or advance
  any claim to remain in possession and run the cinema hall and
. that too after cancellation of the licence, solely on the basis of
  a lease granted by its lessor, a statutory authority, who had no
 7.   AIR 2011 SC 1834.                                                  H
    958      SUPREME COURT REPORTS                    [2012] 2 S.C.R.

A right on the land for the simon pure reason that the owhership
  still remained with the State Government. When no right lies with
  the GDA in respect of the land in view of the conditions
  p'n3cedent as stipulated in the Revenue Book Circular not
  having been satisfied and the nature of the land has remained
B in a sustained state, no legal sanctity can be attached to the
  lease executed by it in favour of the 1st respondent. Th~3 grant
  is:fundamentally ultra vires and hence, the respondent-company
  has to meet its Waterloo.

C     : 22. Quite apart from the above, it is condign to note that
  in a case of the present nature, the common law doctrine of
  public policy can be invoked. The said doctrine be1comes
  enforceable when an action affects or offends public interest
  or where injury to the public at large is manifest. As is
  perceptible, the ~DA could not have granted the lease of the
0
  property belonging to the State Government as it was Nai:ul land
  m~ant for the Public Works Department. The collective interest
  in· the property could not have been jeopardised by usurpation
  of power/authority by the GDA. Such assumption of power by
  the! GDA makes the whole action sans substratum and thereby
E a'nullity. Needless to say, any grant has to have legal sanctity
  and legitimacy.

    ,.Ji 23. For the reasons aforementioned, the appec:1ls are
  allowed and the orders passed in the writ appeal aind the
F application for review, being unsustainable, are set aside. The
  State Government and its functionaries are at liberty to proceed
  against the first respondent for its eviction. It is open to the first
  respondent to take recourse to the arbitration clause against
  th~ GDA for any other relief as advised in law. There shall be
G no order as to costs.
     C':
    BB.B.                                           Appeals allowed.

      "