M/S VIVEK EXPORTSversusSTATE OF KARNATAKA & ORS.

                      [2014] 6 S.C.R. 1154


A                      M/S VIVEK EXPORTS
                                   v.
                  STATE OF KARNATAKA & ORS.
                  (Civil Appeal No. 7773 of 2014)

                          AUGUST 19, 2014
B
                [T.S. THAKUR, C. NAGAPPAN AND
                    ADARSH KUMAR GOEL, JJ.]

          LEASE - Renewal of, validity - Held: If original lease is
C   held invalid, its renewal is also invalid - In the instant case,
    writ petition was filed challenging the renewal of quarry lease
    in favour of appellant after nine years of its grant - In a case
    where lease has been quashed by the Court for whatever
    reason, granting renewal of such a quashed lease was
D   impermissible and may amount to a fraud on the power of
    renewal exercised by the State Government - Delay in this
    case had not worked to the disadvantage of appellant as he
    had worked the lease for nearly 10 years - Such being the
    position, delay was not enough to defeat the action brought
E   by the third respondent before the High Court - The discretion
    exercised by the High Court to ignore the delay in filing of writ
    petition was not vitiated by any error - Delay and latches.

      The appellant was granted quarrying lease for
F ornamental stones on 27 .02.1978 for a period of 5 years
  and the said lease was renewed for a further period of 5
  years ending with 26.02.1988. An application of renewal
  was again filed but same was not considered favorably.
  Meanwhile Rule 3A of Karnataka Minor Mineral
  Concession Rules, 1969 was amended and validity of
G same was challenged in the High Court. The State
  government issued order dated 18.06.1991 resorting to
  Rule 3 for grant and renewal of quarry leases. The
  appellant applied for lease under the said order. On

H                              1154
    VIVEK EXPORTS v. STATE OF KARNATAKA               1155


26.6.1991, 203 quarry leases were granted under Rule 3       A
and the appellant was also granted lease for a term of 10
years. The third respondent filed writ petitions
challenging the validity of Government Order dated
18.06.1991. The High Court quashed the said order and
this was upheld by the Supreme Court. In the meantime,       B
Rule 3A was deleted.
     The State Government issued Notification dated
21.12.2000 notifying the grant of renewal of quarry lease
to the appellant for the same land for a period of ten years
and subsequently by order dated 19.04.2008 the C
Government extended the period of said lease for 20
years with effect froll! 11.05.2001. The third respondent
applied for quarry lease over an area of 20 acres in the
same s'urvey on 13.08.2008. However, in February, 2009
third respondent learnt about the grant of lease to. the D
appellant over 15 acres in the same survey number. The
third respondent filed a writ petition for quashing
Government order dated 21.12.2000 granting lease in
favour of the appellant and for quashing the Government
order rejecting his application and for a direction to notify E
the subject land for grant of lease. The High Court set
aside Government Order dated 21.12.2000 as well as the
rejection order dated 11.01.2010 and directed the
competent authority to reconsider the claim of the third
respondent and also gave liberty to the appellant to show F
that he has a subsisting valid claim and disposed of the
writ petition in the above terms. The instant appeal was
filed challenging the order of the High Court.
     The main contention of the appellant was that the
third respondent has challenged the renewal of the           G
quarry lease after 9 years of its grant and in the absence
of proper explanation, the writ petition is liable to be
dismissed on the ground of delay and laches. It was the
contention of the third respondent that he applied for
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    1156    SUPREME COURT REPORTS                [2014] 6 S.C.R.


A   quarry lease over subject land on 13.8.2008 and, thereafter
    only he learnt about the grant of lease to the appellant,
    and after collecting the details, he filed the writ petition
    challenging the grant of renewal as well as the order
    rejecting his application for grant of lease.
8       Dismissing the appeal, the Court
        HELD: 1. The lease granted to the appellant on
   26.6.1991 was not a renewal but a fresh lease. In fact a
   total number of 203 leases were granted pursuant to the
c Government order dated 18.6.1991. The validity of the said
   Government order was challenged by filing writ petitions
   and the High Court quashed Government order dated
   18.6.1991 and declared all consequential action taken
   under it as null and void. The grantees of leases preferred
   further appeals to this Court and it was held that the
0
   judgment of the High Court holding the grants to be
   invalid does not suffer from any infirmity. Thus lease
   dated 26.6.1991 granted in favour of the appellant was
  .declared invalid. [Para 5] [1160-E-G]
E        A/ankar Granites Industries and Ors. Vs. P. G. R. Scindia,
    MLA and Ors. (1996) 7 sec 416: 1996 (1) SCR 721 -
    referred to.
      2. On behalf of the appellant, a contention was raised
F that the application filed by the appellant on 22.6.1994
  seeking the renewal of the lease under the transitory
  provision Rule 59 of Karnataka Minor Mineral Concession
  Rules, was pending before the State Government. This
  contention is devoid of merit for the reason that original
  lease dated 26.6.1991 granted to appellant was already
G declared invalid. [Para 6] [1160-H; 1161-A]
         3.The first respondent Government issued
     Notification dated 20.11.2000 under Rule 8-A calling upon
    ·interested persons to apply for grant of lease of .the
H
      VlVEK EXPORTS v. STATE OF KARNATAKA               1157


 subject land. Despite that, it issued further Notification    A
,dated 21.12.2000 notifying the grant of renewal of quarry
1lease to the appellant for the same land for a period of
 10 years and subsequently by order dated 19.4.2008 it
 extended the period of said lease for 20 years. The
 original lease granted to the appellant on 26.6.1991          B
 having been held to be invalid, its renewal on 21.12.2000
1as a corollary, is also invalid as rightly held by the High
 Court. [Para 7) [1161-B-D]
       4. Delay in this case has not worked to disadvantage    C
  of ~ppellant as he has worked the lease for nearly 10
  years. No matter the lease was renewed, the grant itself
  was held illegal by the High Court. Delay would have
  assumed importance if the petitioner had altered his
  position to his detriment, so as to make any interference
  to the grant in his favour inequitable. No such plea was     D
  raised by the appellant before the High Court or in this
  appeal. In a case where lease has been quashed by the
; Court for whatever reason, granting renewal of such a
  quashed lease was impermissible and may amount to a
  fraud on the power of renewal exercised by the State         E
  Government. Such being the position, delay was not
  enough to defeat the action brought by the third
  respondent before the High Court. In the instant case, the
  discretion exercised by the High Court to ignore the delay
  in filing of writ petition was not vitiated by any error.    F
  Further in the impugned judgment an opportunity was
  also provided to the appellant to show that he has a
  subsisting valid claim before the competent authority.
  [Paras 9 to 11) [1161-G-H; 1162-A-C, F-G]
      Royal Orchid Hotels Limited and Anr. Vs. G. Jayarama     G
 Reddy and Ors. (2011) 10 SCC 608: 2011 (11) SCR 701 -
 relied on.


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    1158     SUPREME COURT REPORTS               [2014] 6 S.C.R.


A                        Case Law Reference:
        1996 (1) SCR 721          Referred to           Para 5

        2011 (11) SCR 701         Relied on             Para 10

      CIVIL APPELLATE JURISDICTION: Civil Appeal No.7773
B of 2014.

         From the Judgment and order dated 04.01.2011 of the
    High Court of Karnataka at Bangalore in Writ Petition No. 9325
    of 2009.
c
        Dushyant A. Dave, Visvanatha Shetty, L.M.
    Chidanandyayya, S. Udaya Kumar Sagar, Bina Madhavan,
    Shivendra Singh (for Lawyer's Knit Co.) for the appellant.

      Anitha Shenoy, Rajesh Mahale, Krutil') R.Joshi, Shivendra
D Dwivedi for the respondents.

           The Judgment of the Court was delivered by

           C. NAGAPPAN, J. 1. Leave granted.
E        2. This appeal is preferred against the judgment and order
    dated 4.1.2011 passed by the High Court of Karnataka at
    Bangalore in Writ Petition No.9325 of 2009 wherein the
    Division Bench allowed the writ petition filed by the third
    respondent herein.
F
        3. Briefly the facts are as follows: Appellant herein was
  granted a quarrying lease for ornamental stones in Survey
  No.184 of Jyothi Gowdana Pura of Chamarajanagar Taluk for
  a period of 5 years from 27.2.1978 and that was further1
G renewed on 18.1.1983 for a further period of five years ending
  with 26.2.1988. Though an application for another renewal was
  filed, the same was not considered favourably. Meanwhile Rule'
  3A of Karnataka Minor Mineral Concession Rules, 1969, was
  amended and the validity of the same was challenged by
H various persons including the appellant herein before the High
     VIVEK EXPORTS v. STATE OF KARNATAKA                  1159
               [C. NAGAPPAN, J.]

Court. While matter stood thus, the State Government issued A
order dated 18.6.1991 resorting to Rule 3 for grant and renewal
of quarry leases. The appellant herein applied for lease under
the said order and 203 quarry leases were granted under Rule
3 and the appellant herein was also granted lease for a term
of ten years. The validity of the Government order dated B
18.6.1991 was challenged in Writ Petition Nos.14783 and
14241 of 1991 on the file of the High Court of Karnataka at
Bangalore and the learned single Judge quashed the said
Government order and declared all consequential ~ction.taken
under it as null and void. The said order was confirmed by the    c
Division Bench of the High Court as well as by this Court in the
decision reported in (1996) 7 SCC 416. In the meantim~ Rule
3A was deleted. The State Government issued Notification
dated 21.12.2000 notifying the grant of renewal of quarry lease
 to the appellant for the same land for a period of ten years and 0
 subsequently by order dated 19.4.2008 the Government
 extended the period of said lease for 20 years with effect from
 21.5.2001. The third respondent herein applied for quarry lease
 over an area of 20 acres in the same survey No. 184 of Jyothi
 Gowdana Pura of Chamarajanagar Taluk on 13.8.2008 and
 according to him only in the month of February 2009 he learnt E
 about the grant of lease to the appellant herein over an extent
 of 15 acres in the same survey number and after obtaining the
 details by an application under RTI Act, filed the impugned writ
 petition for quashing the Government order dated 21.12.2000
 granting lease in favour of the appellant herein and for quashing F
 the Government order rejecting his application and for a
 direction to notify the subject land for grant .of lease. The
 Division Bench of the High Court set aside the Government
 order dated 21.12.2000 as well as the rejection order dated
 11.1.2010 and directed the competent authority to reconsider G
 the claim of the third respondent herein and also gave liberty
 to the appellant herein to show that he has a subsisting valid
 claim and disposed of the writ petition in the above terms. That
 is being challenged in this appeal.
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    1160     SUPREME COURT REPORTS                [2014] 6 S.C.R.


A       4. We heard the submissions of learned senior counsel          I

    appearing for the appellant as well as the learned counsel
    appearing for the respondents.

          5. The appellant was granted quarrying lease for
B   ornamental stones on 27.2.1978 for a period of 5 years and
    the said lease was renewed for a further period of 5 years
    ending with 26.2.1988, as found by the High Court on
    verification of original records produced before it. Though the
    applicant filed an application for another renewal the same was
    not considered favourably and as per Rule 16 of Karnataka
C   Minor Mineral Concession Rules, 1969, it should be deemed
    to have been refused and the applicant did not have any
    quarrying lease in the subject land from 27.2.1988 onwards.
    Pursuant to the decision of the State Government as per
    Government Order dated 18.6.1991 to resort to Rule (3) for
D   grant of quarry leases the appellant herein applied and was
    granted quarrying lease for a term of 10 years along with
    others. As rightly held by the High Court, the lease granted to
    the appellant on 26.6.1991 was not a renewal but a fresh lease.
    In fact a total number of 203 leases were granted pursuant to
E   the Government order dated 18.6.1991. The validity of the said
    Government order was challenged by filing writ petitions and
    the learned single Judge quashed the Government order dated
    18.6.1991 and declared all consequential action taken under
    it as null and void. The Writ Appeals preferred by the grantees
F   of leases were dismissed by the Division Bench of the High
    Court. They preferred further appeals to this Court and a three-
    Judge Bench of this Court in the decision rendered in Alankar
    Granites Industries and others Vs. P.G.R. Scindia, MLA and
    others (1996) 7 SCC 416 held that the judgment of the High
G   Court holding the grants to be invalid does not suffer from any
    infirmity and dismissed the appeals with costs. Thus the lease
    dated 26.6.1991 granted in favour of the appellant was declared
    invalid.
       6. On behalf of the appellant a contention was raised that
H the application filed by the appellant on 22.6.1994 seeking the
     VIVEK EXPORTS v. STATE OF KARNATAKA                      1161
               [C. NAGAPPAN, J.]
renewal of the lease under the transitory provision Rule 59 of         A
Karnataka Minor Mineral Concession Rules, was pending
before the State Government. This contention is devoid of merit
for the reason that original lease dated 26.6.1991 granted to
appellant was already declared invalid.
     7. The first respondent Government issued Notification            B
dated 20.11.2000 under Rule 8-A calling upon interested
persons to apply for grant of lease in Survey No.184 namely
the subject land. Despite the above. it issued further Notification
dated 21.12.2000 notifying the grant of renewal of quarry lease
to the appellant for the same land for a period of 10 years and        C
subsequently by order dated 19.4.2008 it extended the period
of said lease for 20 years. The original lease granted to the
appellant on 26.6.1991 having been held to be invalid, its
renewal on 21.12.2000 as a corollary, is also invalid as rightly
held by the High Court.                                                D
     8. The main contention of the appellant is that the third
respondent has challenged the renewal of the quarry lease after
9 years of its grant and in the absence of proper explanation,
the writ petition is liable to be dismissed on the ground of delay     E
and laches. It is the contention of the third respondent that he
applied for quarry lease over subject land on 13.8.2008 and,
thereafter only he learnt about the grant of lease to the appellant,
and after collecting the details, he filed the writ petition
challenging the grant of renewal as well as the order rejecting
his application for grant of lease.                                    F

      9. Delay in this case has not worked to disadvantage of
appellant as he has worked the lea~e for nearly 10 years. No
matter the lease was renewed, the grant itself was held illegal
by the High Court. Delay would have assumed importance if              G
the petitioner had altered his position to his detriment, so as
to make any interference to the grant in his favour inequitable.
No such plea was raised by the appellant before the High Court
or in this appeal. Mr. Dushyant A. Dave, learned senior counsel,
feebly argued that the appellant had changed his position to           H
    1162      SUPREME COURT REPORTS                [2014] 6 S.C.R.


A   his detriment. But when called upon to substantiate the plea on
    the basis of record he fairly concedeq that not only the
    averments made were inadequate but no supporting material
    was placed on record. Therefore, candidly he gave up the plea
    based on estoppel promissory or otherwise and rested his
B   case only on delay.
       10. In a case where lease has been quashed by the Court
  for whatever reason, granting renewal of such a quashed lease
  was impermissible and may amount to a fraud on the power
  of renewal exercised by the State Government. Such being the
C position, delay is not enough to defeat the action brought by
  the third respondent before the High Court. While dealing with
  the exercise of power under Article 136 of the Constitution of
  India, this Court in the decision in Royal Orchid Hotels Limited
  and another Vs. G. Jayarama Reddy and others (2011) 10
D SCC 608, observed thus :
         "Another principle of law of which cognizance deserves to
         be taken is that in exercise of power under Article 136 of
         the Constitution, this Court would be extremely slpw to
         interfere with the discretion exercise.d by the High Court
E        to entertain a belated petition under Article 226 of the
         Constitution of India. Interference in such matters would be
         warranted only if it is found that the exercise of discretion
         by the High Court was totally arbitrary or was based on
         irrelevant consideration."
F
       11. In the present case the discretion exercised by the
  Division Bench of the High Court to ignore the delay in filing of
  writ petition, in our view, is not vitiated by any error. Further in
  the impugned judgment an opportunity has also been provided
G to the appellant to show that he has a subsisting valid claim
  before the competent authority.
        12. There is no merit in the appeal and the same is
    dismissed. No costs.

H   Devika Gujral                                    Appeal dismissed.