Supreme Court of India
MANGAL AMUSEMENT PARK (P) LTD. & ANR.versusSTATE OF MADHYA PRADESH & OTHERS
- Citation
- 2012 INSC 355
- Decided
- 28 August 2012
- Disposal
- Dismissed
- Bench
- S S NIJJAR
Holding
The allotment document is a license, not a lease; renewal is not mandatory, promissory estoppel does not apply, and the change of land‑use was not mala fide, so the appeal is dismissed.
Summary
The Indore Development Authority (IDA) allotted a 7‑acre parcel of land to Mangal Amusement Park Ltd. for a children's amusement park under a document labeled a "license" for 15 years, with a provision for renewal. The State of Madhya Pradesh later changed the land‑use from "commercial" to "regional park" and directed IDA to re‑tender the land, prompting the appellants to challenge the change, the renewal provision, and claim promissory estoppel, alleging the change was mala fide. The Supreme Court examined whether the document created a lease or a license, applying the tests from earlier case law and the definitions in the Transfer of Property Act and the Indian Easements Act. It held that the document was a license, not a lease, and therefore did not confer any interest that would obligate renewal; the renewal clause was not mandatory and the license had already expired. The Court also rejected the doctrine of promissory estoppel and found no factual basis to infer mala fides in the land‑use change. Consequently, the appeal was dismissed.
Issues considered
- The nature of the document of allotment: lease or license?
- Whether the renewal clause in the license creates a mandatory right to renewal.
- Whether the doctrine of promissory estoppel can be invoked to compel renewal.
- Whether the State's change of land‑use was made with mala fides for the benefit of another party.
- Whether the State's letter and notification directing fresh tender can be quashed.
Legislation cited
- Indian Easements Act, 1882s. 52
- Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973s. 23-A(2), s. 73
- Transfer of Property Act, 1882s. 105
Subjects
lease vs licenseland use changepromissory estoppeltown planning schemedevelopment authorityrenewal of licenseadministrative lawmalafidepublic interest
Judgment
[2012] 10 S.C.R. 388
A MANGAL AMUSEMENT PARK (P) LTD. & ANR.
V.
STATE OF MADHYA PRADESH & OTHERS
(Civil Appeal No. 6105 of 2012)
AUGUST 28, 2012
B
[SURINDER SINGH NIJJAR AND H.L. GOKHALE, JJ.]
Town Planning - Town planning scheme of Indore -
Allotment of land - To appellants for establishment of
C Children's amusement park - Subsequently State
Government changing the land-use from 'commercial' to
'regional park' and further directing the Indore Development
Authority (/DA) to invite tenders afresh for re-allotment of the
land - Three-fold plea of appellants- a) that the document of
D allotment was a document of lease and not simply a license,
and appellants were entitled to renewal thereof, (b) that
appellants had made good investment onto the concerned
land, and had their legitimate expectations and consequently,
respondents were bound by the doctrine of promissory
E estoppel to renew the allotment, and (c) that the decision to
change the land-use was a malafide one for benefit of another
party - Held: Not tenable - The document of allotment when
read in the entirety makes it clear that /DA retained complete
control over the concerned land and the manner in which
F facilities in the amusement park were to be enjoyed - No
exclusive possession was handed over to the appellants -
The document merely granted a permission to use the
concerned land in a particular manner, without creating any
interest therein - Hence, the document was a license, and not
G a lease - The provision of renewal contained therein cannot
be read as laying down a mandatory requirement - In any
event, the license had come to an end by efflux of time and
thus cannot be renewed - Besides, respondents had valid
reasons not to renew the license - Appellants sought to
construct an amusement Club and a Banquet Hall which
H 388
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 389
STATE OF MADHYA PRADESH
would have been used by adults and certainly did not fit in A
the purpose of a Children's Amusement Park - Also,
necessary action to establish Children's Amusement Park
had not been taken since half of the land had remained
undeveloped, and it amounted to violating the conditions of
license - Doctrine of promissory estoppel cannot be invoked B
in such a background - Also, appellants had not joined any
of those parties for whose benefit the change of land-use had
been allegedly made - In absence of factual basis, the court
is precluded from going into the plea of malafides.
c
Transfer of Property Act, 1882 - s. 105 - Lease and
license - Distinction between - Held: Lease is not a mere
contract but envisages and transfers an interest in the
demised property creating a right in favour of the lessee in
rem - As against that a license only makes an action lawful D
which without it would be unlawful, but does not transfer any
interest in favour of the licensee in respect of the property -
Indian Easements Act, 1882 - s.52.
The Indore Development Authority (IDA) had floated
tenders for setting up of an amusement park on a parcel E
of land owned by it. Under the then subsisting
Development Plan, the designated land-use was
'commercial'. The appellants were allotted the said parcel
of land for the establishment of a Children's amusement
park and were accordingly granted a license by the IDA. F
Later, respondent nos.1 and 2 i.e. the State and the Town
Planning Department proposed to change the user of this
parcel of land from 'commercial' to 'regional park'. The
appellants raised objections against the proposed
modification and sought permission for putting up a G
banquet hall and an amusement club on the said parcel
of land. Vide letter dated 23-9-2003, the State Government
declined the permission sought by the appellants and
asked IDA to invite tenders afresh for re-allotment of the
plot. The State Government also issued notification 19- H
390 SUPREME COURT REPORTS [2012) 10 S.C.R.
A 11-2003 changing the land-use from 'commercial' to
'regional park'.
The appellants filed writ petition challenging the letter
dated 23-9-2003 and notification dated 19-11-2003 and
raised the following three-fold submissions: (a) the
8
document of allotment of the concerned parcel of land to
the appellants was a document of lease and not simply
a license, and the appellants were entitled to the renewal
thereof, (b) the appellants had made good investment
C onto the concerned parcel of land, and they had their
legitimate expectations and consequently, the
respondents were bound by the doctrine of promissory
estoppel to renew th.e allotment, and (c) the decision to
change the land-use was a malafide one for the benefit
of another party which had its parcel of land in the
D vicinity, where the land-use was changed from the
previous one which was 'regional park', to 'commercial';
and the change of use of the parcel of land allotted to the
appellants was effected to set off the resultant reduction
in green area, and to justify the change of land-use of the
E parcel of land allotted to the other party. The writ petition
was dismissed by the High Court and therefore the
instant appeal.
Dismissing the appeal, the Court
F HELD: 1. Lease is defined in Section 105 of the
Transfer of Property Act, 1882 while license is defined
under Section 52 of the Indian Easements Act, 1882. From
the two definitions it is clear that a lease is not a mere
contract but envisages and transfers an interest in the
G demised property creating a right in favour of the lessee
In rem. As against that a license only makes an action
lawful which without it would be unlawful, but does not
transfer any interest in favour of the licensee in respect
of the property. [Para 16] [406-F; 407-B, D-E]
H
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 391
STATE OF MADHYA PRADESH
Associated Hotels of India v. R.N. Kapoor AIR 1959 SC A
1262: 1960 SCR 368; Konchanda Ramamurty Subudhi
(dead) v. Gopinath Naik and Ors. AIR 1968 SC 919: 1968
SCR 559 and Capt. B. V. D'Souza v. Antonio Fausto
Fernandes AIR 1989 SC 1816: 1989 (3) SCR 626 - relied
on. B
Errington v. Errington 1952-1 All ER 149 and Cobb v.
Lane 1952-1 All ER 1199 - referred to.
2.1. In the instant case, on perusal of the document
of allotment, the following facts are noticed:- (i) The first C
clause does provide that the land is given on license
initially for a period of 15 years, and clause 8 does lay
down that the license may be renewed for a further period
of 15 years by enhancing the license fee maximum by
40%, and thereafter at such a percentage as may be
decided by the Authority. The document of allotment is D
called a 'license', and the allottee is called a 'licensee'. In
the very first clause, it is stated that the concerned parcel
of land is given on license, and clause 4 refers to the
amount payable by the licensee as the license fee which
is to be paid annually before the first of June. (iii) Clause E
11 of the document requires the licensee to provide the
specified games and rides in the amusement park. Not
only that but clause 10 further requires that the rides,
games etc. should be bought from the suppliers
manufacturing them in India indigenously. (iv) Clause 7 F
authorises IDA to regulate the mode of collection of entry
fee, and clause 5 provides that the amount equal to 25%
of the entry fee will be charged by the IDA in addition to
the license fee. Clause 7 further provides that the
Authority (i.e IDA) or the officer authorised by the G
Authority will have the power to examine the accounts of
collection of entry fee, as and when deemed fit. [Para 20]
[409-H; 410-A-F]
2.2. The concerned document has to be read as a
H
392 SUPREME COURT REPORTS [2012] 10 S.C.R.
A whole, and when one sees the above clauses together,
it becomes clear that IDA retained complete control over
the concerned parcel of land. The manner in which the
facilities in the amusement park were to be enjoyed was
completely controlled by the IDA. The IDA decided as to
B what games and rides were to be provided. It also laid
down as to from which suppliers these games and rides
were to be purchased. IDA further regulated the mode of
collection of entry fee, and had the right to examine the
accounts of collection thereof as and when it deemed fit.
c Over and above, Clause 14 of the document specifically
provided that in the event of violation of any of these
terms and conditions on the part of the licensee, the
decision of the Chairman of IDA will be final, indicating
the right of IDA to terminate the license in the event of
such a contingency. When all these clauses are seen
0
together, it becomes clear that there was no exclusive
possession handed over to the appellants. Thus, the
document of allotment merely granted a permission to
use the concerned parcel of land in a particular manner,
and without creating any interest therein. Hence, the
EE document will have to read as granting a license, and not
a lease. [Para 21] [410-G-H; 411-A-D]
Sudhir Kumar & Ors. vs. Baldev Krishna Thapar & Ors.
1969 (3) sec 611- cited.
F 3. The appellants have tried to make much ado about
the stand which the IDA took on earlier occasions in
favour of the appellants. However, where different
authorities are dealing with a particular subject, it is quite
possible that on some occasions, they may take a stand
G different from each other, though ultimately it is the
decision of the competent authority which matters, and
it cannot be tainted w.ith mala tides merely on that count.
[Para 23] [412-A-C]
Jasbir Singh Chhabra & Ors. v. State of Punjab 2010 (4)
H sec 192 - relied on.
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 393
STATE OF MADHYA PRADESH
Punjab State Electricity Board Ltd. v. Zora singh and Ors. A
2005 (6) sec 776: 2005 (2) Suppl. SCR 524 - cited.
4. The High Court held in the impugned judgment
that in any case admittedly the license had come to an
end by efflux of time in the month of the June 2010, and
8
therefore the validity and legality of the letter/order dated
23.9.2003 had become academic, and it was no longer
necessary to examine that issue. No fault can be found
with the High Court on that account, since quashing of
this letter cannot in any way lead to the renewal of the
license which had already expired. Besides, the C
respondents had valid reasons not to renew the license
as Indicated in the show cause notice dated 8.1.2007. The
construction of Amusement Club or a Banquet Hall (as
sought to be done by the appellants) could certainly not
be a part of a Children's Amusement Park. The parcel of D
land was allotted for setting up of a children's park with
games and rides as indicated in the document of license.
Additionally, what was permitted were the food and
beverages centers, kiosks, shops, administrative building
and toilets, which would be in furtherance of this E
objective. The Banquet Hall and an amusement club
which would be used by adults would not fit in the
purpose of Children's Amusement Park. As stated in
clause 8 of the show cause notice, it clearly indicated that
the appellants did not want to run the activity related to F
the Children's amusement park on the land allotted. [Para
24) [412-G-H; 413-A-D]
5. Since the document of allotment was a license and
not one creating any interest, the provision of renewal G
contained therein cannot be read as laying down a
mandatory requirement. Besides, clause 14 of the
document of license clearly stated that in the event of
violation of any of the terms and conditions on the part
of the licensee, the decision of the Chairman of IDA was
final. Para 7 of the show cause notice in fact stated that H
394 SUPREME COURT REPORTS [2012] 10 S.C.R.
A the necessary action to establish the Children's
Amusement Park had not been taken since half of the
land had remained undeveloped, and it amounted to
violating the conditions of license. The doctrine of
promissory estoppel can certainly not be permitted to be
B invoked on such a background. [Para 25 (ii)] [413-H; 414-
A-B]
6. The appellants had not joined any of those parties
for whose benefit this change had been allegedly made.
In the absence of factual basis, the court is precluded
C from going into the plea of malafides. As far as the land
meant for the Children's amusement park is concerned,
the same was hardly put to the full use. Inasmuch as this
entire parcel of land of about 7 acres was not utilized, and ·
since it was an open parcel of land, there was nothing
D wrong in the State Government deciding to retain it as an
open parcel of land, and to change the land-use thereof
from commercial to a regional park. [Para 26 (ii)] [414-G-
H; 415-A]
E Girias Investment (P) Ltd. vs. State of Kamataka & Ors.
2008 (7) sec 53: 2008 (4) SCR 948 - relied on.
Case Law Reference:
1960 SCR 368 relied on Para 17
F 1952-1 All ER 149 referred to Para 18
1952-1 All ER 1199 referred to Para 18
1968 SCR 559 relied on Para 18
G 1989 (3) SCR 626 relied on Para 18
1969 (3) sec 611 cited Para 19
2005 (2) Suppl. SCR 524 cited Para 22
2010 (4) sec 192 relied on Para 23
H
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 395
STATE OF MADHYA PRADESH
2008 (4) SCR 948 relied on Para 26 A
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6105 of 2012.
From the Judgment and Order dated 19.05.2011 of the
High Court of Judicature at Jabalpur (Madhya Pradesh) in Writ B
Petition No. 5698/2008.
Ranjit Kumar, Rahul Kaushik, Rishabh Sancheti Sameer
Sodhi, K.L. Yadav for the Appellants.
Vikas Singh, Sanjay Kapur, Anmol Chandan, Ashmi
c
Mohan, Priyanka Das, Vibha Datta Makhija for the
Respondents.
The Judgment of the Court was delivered by
D
H.L. GOKHALE J. 1. Leave granted.
2. This appeal by special leave seeks to challenge the
judgment and order dated 19.5.2011 rendered by a Division
Bench of the Madhya Pradesh High Court dismissing the Writ
Petition bearing No.5698/2008 filed by the appellants herein, E
The said petition sought to challenge the change of land-use
from 'commercial' to a 'regional park' of a parcel of land which
had been allotted to the appellants in the town planning scheme
of Indore, and also the decision of the State Government that
the concerned land be utilized only after inviting fresh tenders. F
3. The first appellant herein is a Company registered
under the provisions of the Companies Act, 1956, and the
second appellant is its Managing Director. The respondent
No.1 to this appeal is the State of Madhya Pradesh through its G
Principal Secretary, Department of Housing and Environment,
Bhopal, whereas the respondent No.2 is the Director of Town
and Country Planning of Madhya Pradesh. The third respondent
to this appeal is Indore Development Authority ("IDA" for short),,
through its Chairman, whereas the fourth respondent is the H
396 SUPREME COURT REPORTS [2012] 10 S.C.R.
A same Authority through its Chief Executive Officer. Shri Ranjit
Kumar, learned senior counsel has appeared for the appellants.
Shri Vikas Singh, learned senior counsel has appeared for the
first two respondents, and Ms. Vibha Datta-Makhija, learned
counsel has appeared for respondent no.3 and 4.
B
Facts leading to this appeal:-
4. During November 1991 to February 1992, IDA floated
tenders through advertisements for setting up of an amusement
park on a parcel of land owned by it situated in village Bhamori-
C Dubey. The concerned land admeasured about seven acres
comprising of s.urvey nos. 91 part, 92/1, 93/1, 93/2, 94/1, 94/
2, 95/1, 95/2, 96/1, 96/2, 152, 155 part, 157, 159, 160, 162,
163, 164 part, 165 part and 166 part and was situated within
Scheme No.54. There is no dispute that under the then
D subsisting Development Plan the designated land-use of these
survey nos. w~s 'commercial'. It is the case of the appellants
that though th~ applied in pursuance to the advertisement, and
though the appellants were the most eligible, IDA arbitrarily
delayed the a~ceptance of their tender. This led the appellants
E to file an earjier writ petition in the High Court of Madhya
Pradesh bearihg M.P. No.313/1992 which was allowed by the
High Court. Consequently, the appellants were allotted this
parcel of land for the establishment of a Children's amusement
park.
F 5. Accordingly, IDA granted a license to the appellants, the
terms and conditions of which were as follows:-
LICENSE
(FOR AMUSEMENT CENTRE)
G Dated 6.5.1994
This license is granted to Shri Ramesh Mangal son of Shri
Manikchand Mangal age 48 years, resident of 8/2, New
Palasia, Indore, Managing Director, Mis Mangal
Amusement Park Pvt. Ltd., Indore, by the Indore
H
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 397
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
Development Authority Indore (M.P.). T~rms and conditions A
of this license shall be as follows:-
TERMS AND CONDITIONS:-
The land measuring 7 acres is given to Mis Mangal
Amusement Park Pvt. Ltd. (hereinafter called the 'Licensee B
vide letter No.4179 dated 4.4.1994 on license by the
Indore Development Authority initially for a period of 15
years. The licensee will have to develop inside
infrastructure such as path-ways, roads, boundary walls,
land installation of rides and games etc. at his own cost C
as approved by the Authority. Construction of Food &
Beverage's Centres, Kiosks, Shops, Administrative
building, toilet shall also be permissible as per
requirement.
D
2. The period of license shall commence from the date of
activation of the park or 18 months from the date of giving
possession, whichever is earlier.
3. The period of completion of the project shall be 24
months (inclusive of Monsoon season) from the date of E
handing over the possession of the said land. Failing
which, the license may be terminated, forfeiting the Earnest
Money and other payments, if any, by the Authority.
4. The advance license fee shall be payable annually F
before first of June. In case, the licensee fails to pay the
fee on or before the due date, an interest at the rate of 18%
per annum shall be charged for period defaulted. The
interest shall be calculated on the license fee itself for full
calendar month. G
5. In addition to the license fee, an amount equal to 25%
of the entry fee will be charged by the l.D.A. and has to be
paid by the licensee by 10th of next month.
6. Earnest Money of Rs.1,00,000/- has been kept with H
398 SUPREME COURT REPORTS [2012) 10 S.C.R.
A l.D.A. and no interest shall be given on the amount of
Earnest Money. This amount shall be adjusted towards
license fee 1,81,000.00 (Rs. One Lac eighty thousand only)
per year on commission of the project.
7. The Authority or an officer authorized in this behalf shall
B
have the power to examine the accounts of collection of
entry fee, as and when deemed fit. The Authority may
further regulate the mode of collection of entry fee. The duty
of collection of entry fee will rest on the licensee himself.
c 8. The license may be renewed for further period of 15
years by enhancing the license fee, maximum by 40% and
thereafter at such a percentage as may be decided by the
Authority.
D 9. Bank Guarantee of Rs.5,00,000/- (Rs. Five lacs only)
given by the licensee shall be redeemed after three
complete years from the date of activation of the
amusement park.
10. The rides, games etc. should be bought from the
E suppliers manufacturing these in India indigenously.
11. At least one roller coaster, one ferries wheel and bay
train, one set of merry cups, one Columbus and one
telecombat must be erected with other rides.
F
12. The complete amusement centre shall be operated
and managed by the licensee himself at his own cost and
responsibilities.
13. In the event of any increase or decrease in the area
G on physical measurement, the license fee shall be subject
to the increase or decrease proportionately.
14. In the event of violation of any of the terms and
conditions mentioned hereinabove, on the part of the
H licensee, the decision of the Chairman, Indore
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 399
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
Development Authority shall be final. A
15. Land for which licnese is granted is marked in green
colour in .......... plan.
SIGNATURE OF LICENSEE"
B
6. It is the case of the appellants that they submitted the
plans, maps and drawings for necessary construction, and
thereafter started using the concerned parcel of land as
amusement park.
7. It so transpired that sometime in December 1999, C
respondent nos.1 and 2 i.e. the State and the Town Planning
Dept. initiated the process of modification of the Development
Plan. In that process it was proposed to change the user of this
parcel of land from 'commercial' to 'regional park' (i.e. a green
area). The Chairman of IDA however, wrote in that context to D
the respondent nos.1 and 2 on 7.12.1999 that such a change
was not desirable, since the use of the concerned land was
already secured for a specified purpose in the master plan. The
State Govt. however proceeded to issue a notification on
9.3.2001 under Section 23-A (2) of Madhya Pradesh Nagar E
Tatha Gram Nivesh Adhiniyam, 1973 (M.P. Act for short)
proposing the change of the land-use from 'commercial' to
'regional park', and inviting objections thereto. The appellants
did raise objections against the proposed modification which
were heard by the Principal Secretary to the Govt. of Madhya F
Pradesh on 23.8.2001.
8. It is the case of the appellants that they wanted to put
up a banquet hall and an amusement club on this parcel of
land, and therefore sought the requisite permission from IDA. G
IDA in fact passed a resolution bearing No. 133 on 8.5.2003
recommending grant of such permission though subject to the
conditions mentioned therein. The Chief Executive Officer of
IDA accordingly wrote to the Principal Secretary of the Madhya
Pradesh Govt. on 27.5.2003 for grant of this permission, and H
400 SUPREME COURT REPORTS [2012] 10 S.C.R.
A consequently for the increase in the license.fee. The State Govt.
however wrote back on 2;3.9.2003 declining the request, and
asking IDA to invite the tenders afresh for the re-allotment of
the plot (the appellants however contend that there is a contrary
note on the files of the respondents dated 29.9.2003
B recommending the proposed use). That apart, ultimately the
Madhya Pradesh Govt. issued the notification approving the
change in the land-use from 'commercial' to a 'regional park'
on 19.11.2003. It is this letter dated 23.9.2003 and notification
dated 19.11.2003 which were challenged by the appellants by
C filing Writ Petition No.5698/2008 in the High Court of Madhya
Pradesh.
9. This letter dated 23.9.2003 reads as follows:-
M.P. Government
D Housing and Environment Department
Ministry
Letter No.H-3-107/3/32 Bhopal Date 23.09.2003
To,
E
The Chief Executive Officer
Indore Development Authority
Indore, M.P.
Sub: Regarding grant of permission to Mangal
F Amusement Park Pvt. Ltd. for the construction of
Amusement Club, Banquet Hall on the land allotted
under plan No.54 of the Indore Development
Authority.
G Ref: Your letter No.6314 dated 23.05.03.
Please take reference of the letter referred above, by which
Authority had sought permission from Govt. for proposal
on land allotted by Authority on lease 1994.
H
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 401
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
2. It has been established from the documents made A
available by the Authority that proceedings by the
Authority have not been in accordance with the rules
and there has been lack of transparency. Therefore,
it is not possible to give permission on this
proposal of Authority. B
3. It is directed to Authority that it utilize the land in
question only after issuing fresh notification inviting
tenders.
Sd/- C
Illegible
23.09.03
(C.C. Padiyar)
Under Secretary
M.P. Govt. Housing and Environmental Department" D
10. The notification dated 19.11.2003 reads as follows:-
•HOUSING & ENVIRONMENT DEPARTMENT
Vallabh Bhawan, Bhopal. E
Bhopal dated 19th November, 2003.
No.F-3-47-0000-32 - The State Government vide its
Notification No.F-3-47-2000-32 dated 9th March, 2001
issued under Section 23(A) (2) of the Madhya Pradesh F
Urban and Rural Act, 1973 (Act No.23/1973) had
proposed certain modifications in public interests.
Thereafter notices to the above effect were also published
in 2 leading newspapers on 15th ad 16th March, 2001.
Through said notice, Objections were invited from the G
aggrieved persons and ultimately 4 objections were
received jointly and individually. Thereafter objectors of the
said objections were heard on 3.8.2001 and 23.8.2001
and their objections were considered and were finally
rejected. Thereafter Department sought an opinion from the H
402 SUPREME COURT REPORTS [2012] 10 S.C.R.
A Municipal Corporation of Indore on the proposed
modification and the Municipal Corporation has granted
its No Objection vide letter dated 1st June, 2001.
(2) In the premises aforesaid, State Government hereby
confirms modification of the following lands of Village
B
Bhamori Dubey, Indore, as described in Schedule 'A'
hereunder, according to user prescribed in the Indore
Development scheme, 1991. It is further informed that this
modification will be an integrated part of the Approved
Indore Development Scheme, 1991 as well as Draft
c Development Scheme, 2011.
SCHEDULE 'A'
Land use modification of 18.222 Hectares and
D 17.931 Hectares situated in Village Bhamori Dubey
under Indore Development Scheme, 1991-
Sr. No. Survey Area (In Land user Change
No. Hect). prescribed land use
in the Indore
E Development
Scheme
(1) (2) (3) (4) (5)
1. 257 & 259 9.134 Regional Commercial
F ·Park
2. 258 part 0.113 -- -
• •
260 1.000 • •
3. 261 1.295 -• - •
G
4. 262 1.474 -. - •
5. 264 0.522 -• - •
6. 265 2.429 -• - •
7. 265 part 2.255 -• - •
H
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 403
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
18.222 A
8. 91 part 0.713 Regional Commercial
Park
9. 92/1 0.429 -• - "
B
10. 92/2 0.425 -•- "
11. 93/1 1.060 -• - "
12. 93/2 1.064 -" - •
13. 94/1 0.235 -• - " c
14. 94/2 0.235 -" - •
15. 95/1 0.219 -" - "
16. 95/2 0.223 -" - •
D
17. 96/1 0.117 -" - "
18. 96/2 0.117 -" - "
19. 152 0.174 -" - "
20. 155 part 0.267 -" - " E
21. 157 0.186 -• - "
22. 159 0.344 -" - •
23. 160 0.360 -" - "
.. F
24. 161 0.170 -"-
25. 162 8.259 Commercial Regional
Park
26. 163 1.967 -• - "
.. .. G
27. 164 part 0.607 - -
28. 165 part 0.534 -• - "
29. 166 part 0.226 -• - ..
17.931 H
404 SUPREME COURT REPORTS [2012] 10 S.C.R.
A In the name of and by Order of Governor
Shivanand Dubey,
Deputy Secretary"
11. The appellants point out that thereafter also the stand
B of IDA was different from that of the concerned department as
reflected in the Notesheet of IDA dated 3.2.2005. Yet, ultimately
it accepted the view-point of the State Govt., and issued a show
cause notice to the appellants on 8.1.2007 alleging various
breaches of the terms and conditions of allotment. In para 7 and
C 8 thereof, it was alleged as follows:-
"7. You have not taken action to establish Children's
Amusement Park on the land allotted violating conditions
of license. Half of the land is still undeveloped, vacant and
D without any use given after 12 years of allotment.
8. Application for the construction of Amusement
Club, Banquet Hall on the land allotted, given by you
establishes that you do not want to run activities relating
to Children's Amusement Park on the land allotted."
E
The appellants were, therefore, asked to show cause as
to why the license of land allotted to them should not be
cancelled.
F 12. It is the further case of the appellants that although this
show cause notice was issued on 8.1.2007, the Chairman of
IDA once again wrote to the Govt. on 29.11.2007 asking it to
retain the land-use of this particular parcel of land as
commercial. The State Govt. however proceeded to bring the
modification into force with effect from 1.1.2008. It" is at this
G stage that the above writ petition No. 5698 of 2008 was filed
with the following prayers:-
{a} to strike down Section 23-A of Madhya Pradesh
Nagar Tatha Gram Nivesh Adhiniyam 1973 {which
H prayer was however not pressed},
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 405
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
(b) to quash the notification dated 19.11.2003, and A
(c) to quash Govt.'s letter dated 23.9.2003 (which
prayer was added later on).
13. Contentions of the rival parties
B
The principle submission of the appellants was three-fold:-
(a) the document of allotment of the concerned parcel of
land to the appellants was a document of lease and not simply
a license, and that the appellants were entitled to the renewal C
thereof,
(b) the appellants had made good investment onto the
concerned parcel of land, and they had their legitimate
expectations. Consequently, the respondents were bound by the
doctrine of promissory estoppel to renew the allotment, D
And
(c) the decision to change the land-use was a malafide one
for the benefit of another party which had its parcel of land in
the vicinity, where the land-use was changed from the previous E
one which was 'regional park', to 'commercial'. The change of
use of land of the parcel allotted to the appellants was effected
to set off the resultant reduction in green area, and to justify the
change of land-use of the parcel of land allotted to the other
~~ F
14. The petition was opposed by respondent nos. 1 and
2 on the one hand, and by respondents no.3 and 4 by filing their
replies. They contended principally as follows:-
(a) the concerned document of allotment was clearly a G
document of license, and not that of lease. In any case, by that
time the period of license having expired after the lapse of 15
years, the appellants did not have any case for renewal
particularly when they had not put to use half of the land for the
purpose for which it was allotted, and when in fact they wanted H
406 SUPREME COURT REPORTS (2012] 10 S.C.R.
A to use it for another purpose by putting up a banquet hall therein.
(b) Inasmuch as, the document of allotment was a license
which was valid only for 15 years, there was no question of the
appellants having a legitimate expectation for a renewal beyond
15 years. The respondents had not promised any such renewal
8
to the appellants to enable them to avail of the doctrine of
promissory estoppel.
(c) The modification in the development plan was effected
after considering all relevant factors and not for obliging
C anybody. No material in support of their allegation had been
produced by the appellants. The change was effected after
following the due process of law, viz. inviting suggestions and
objections, and hearing the concerned parties. The change
cannot be faulted on that count either.
D
15. The petition was heard by a Division Bench of the
Madhya Pradesh High Court which dismissed the same by its
judgment and order dated 19.5.2011, after hearing the counsel
for all the parties. This judgment is under challenge in the
E present appeal.
16. Consideration of the rival submissions
The principle question to be considered is as to whether
the document of allotment of land dated 6.5.1994 was in any
F way a lease or a license. As far as a lease is concerned,
Section 105 of the Transfer of Property Act, 1882, defines it
a!? follows:-
" 105. Lease defined.- A lease of immoveable
property is a transfer of a right to enjoy such property,
G made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or promised,
or of money, a share of crops, service or any other thing
of value, to be rendered periodically or on specified
occasions to the transferor by the transferee, who accepts
H the transfer on such terms.
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 407
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
Lessor, lessee, premium and rent defined. - The A
transferor is called the lessor, the transferee is called the
lessee, the price is called the premium, and the money,
share, service or other thing to be so rendered is called
the rent."
B
As far as a license is concerned, the same is defined under
Section 52 of the Indian Easements Act, 1882, as follows:-
"52. "License" defined. - Where one person
grants to another, or to a definite number of other
persons, a right to do, in or upon the immovable C
property of the grantor, something which would, in
the absence of such right, be unlawful, and such
right does not amount to an easement or an
interest in the property, the right is called a
license." D
From these two definitions it is clear that a lease is not a
mere contract but envisages and transfers an interest in the
demised property creating a right in favour of the lessee in rem.
As against that a license only makes an action lawful which E
without it would be unlawful, but does not transfer any interest
in favour of the licensee in respect of the property.
17. The issue concerning the distinction between lease and
license came up for consideration before this court in
Associated Hotels of India vs. R.N. Kapoor reported in AIR F
1959 SC 1262. In para 27 of his judgment, Subba Rao,J. (as
he then was) observed therein as follows with respect to lease:-
27. There is a marked distinction between a lease
and a license. Section 105 of the Transfer of Property Act G
defines a lease of immovable property as a transfer of a
right to enjoy such property made for a certain time in
consideration for a price paid or promised. Under Section
108 of the said Act, the lessee is entitled to be put in
possession of the property. A lease is therefore a transfer H
408 SUPREME COURT REPORTS [2012] 10 S.C.R.
A of an interest in land. The interest transferred is called
the leasehold interest. The lessor parls with his right to
enjoy the properly during the term of the lease, and it
follows from it that the Jessee gets that right to the
exclusion of the lessor..... "
B
Thereafter, the learned Judge referred to the definition of
license, then observed as follows:-
"Under the aforesaid section, if a document gives
only a right to use the properly in a parlicular way or
c under cerlain terms while it remains in possession and
control of the owner thereof, it will be a license. The legal
possession, therefore, continues to be with the owner of
the properly, but the licensee is permitted to make use
of the premises for a parlicular purpose. But for the
D permission, his occupation would be unlawful. It does not
create in his favour any estate or interest in the properly.
There is, therefore, clear distinction between the two
concepts. The dividing line is clear though sometimes it
becomes very thin or even blurred."
E
18. Subba Rao, J., thereafter referred to the judgments of
Court of Appeal in Errington V. Errington, 1952-1 All ER 149,
and Cobb V. Lane, 1952-1 All ER 1199, and then observed
as follows:-
F "The following propositions may, therefore, be taken
as we/I-established: (1) To ascerlain whether a document
creates a license or lease, the substance of the
document must be preferred to the form; (2) the real test
is the intention of the parties - whether they intended to
G create a lease or a license; (3) if the document creates
an interest in the property, it is a lease; but, if it only
permits another to make use of the properly, of which the
legal possession continues with the owner, it is a license;
and (4) if under the document a party gets exclusive
H possession of the properly, prima facie, he is considered
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 409
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
to be a tenant; but circumstances may be established A
which negative the intention to create a lease."
These propositions have been quoted with approval
subsequently by a bench of three Judges in Konchanda
Ramamurty Subudhi (dead) V. Gopinath Naik and Ors. B
reported in AIR 1968 SC 919, and in Capt. B. V. D'Souza V.
Antonio Fausto Fernandes reported in AIR 1989 SC 1816.
19. (i) Having seen this legal position, we may now
examine the submissions of the rival parties. It was submitted
by Shri Ranjit Kumar, learned senior counsel that, it has to be C
noted that though the document of allotment states that the
license is granted initially for a period of 15 years, clause 8
thereof adds that it may be renewed for a further period of 15
years by enhancing the license fee maximum by 40%, and
thereafter at such a percentage as may be decided by the D
authority. This indicated the permission to the allottee to remain
on the concerned parcel of land for a period of 30 years and
more, and should therefore be construed as creating an interest
in the parcel of land. Therefore, in his submission the document
of allotment created a lease, and renewal thereof was a matter E
of formality, and the IDA was bound to renew the document.
He referred to the judgment of this Court in Sudhir Kumar &
Ors. vs. Baldev Krishna Thapar & Ors. reported in 1969 (3)
sec 611 to submit that a lessor cannot withhold his consent
for renewal unreasonably. F
(ii) Shri Vikas Singh, learned senior counsel appearing for
IDA and Ms. Vibha Datta-Makhija, learned counsel for the State
Govt. submitted on the other hand that the possession of the
allottee was merely a permissive one, and that it was not
exclusive to warrant an inference of creation of an interest. In G
their view, the document of allotment when read in the entirety
makes it very clear that it was a license and not a lease.
20. In the instant case, if we peruse the document of
allotment, the following facts are noticed:- H
410 SUPREME COURT REPORTS (2012] 10 S.C.R.
A (i) The first clause does provide that the land is given on
license initially for a period of 15 years, and clause 8 does
lay down that the license may be renewed for a further
period of 15 years by enhancing the license fee maximum
by 40%, and thereafter at such a percentage as may be
B decided by the Authority. We must, however, as well note
the other provisions in the document of allotment and their
effect.
(ii) In the instant case, the document of allotment is called
a 'license', and the allottee is called a 'licensee'. In the very
c first clause, it is stated that the concerned parcel of land
is given on license, and clause 4 refers to the amount
payable by the licensee as the license fee which is to be
paid annually before the first of June.
D (iii) Clause 11 of the document requires the licensee to
provide the specified games and rides in the amusement
park. Not only that but clause 10 further requires that the
rides, games etc. should be bought from the suppliers
manufacturing them in India indigenously.
E
(iv) Clause 7 authorises IDA to regulate the mode of
collection of entry fee, and clause 5 provides that the
amount equal to 25% of the entry fee will be charged by
the IDA in addition to the license fee. Clause 7 further
provides that the Authority (i.e IDA) or the officer
F authorised by the Authority will have the power to examine
the accounts of collection of entry fee, as and when
deemed fit.
21. It must also be noted that the concerned document has
G to be read as a whole, and when we see the above clauses
together, it becomes clear that IDA retained complete control
over the concerned parcel of land. The manner in which the
facilities in the amusement park were to be enjoyed was
completely controlled by the IDA. The IDA decided as to what
H
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 411
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
games and rides were to be provided. It also laid down as to A
from which suppliers these games and rides were to be
purchased. IDA further regulated the mode of collection of entry
fee, and had the right to examine the accounts of collection
thereof as and when it deemed fit. Over and above, Clause 14
Qf the document specifically provided that in the event of B
violation of any of these terms and conditions on the part of the
licensee, the decision of the Chairman of IDA will be final,
indicating the right of IDA to terminate the license in the event
of such a contingency. Obviously when all these clauses are
seen together, it becomes clear that there was no exclusive c
possession handed over to the appellants. Thus, the document
of allotment merely granted a permission to use the concerned
parcel of land in a particular manner, and without creating any
interest therein. Hence, if we apply the tests which have been
laid down by this court way back in the year 1959 (and followed D
subsequently) the document will have to read as granting a
license, and not a lease.
22. The appellants had challenged the legality of the letter/
order dated 23.9.2003 issued by the State Government to the
IDA. That letter/order while declining the proposal of IDA to E
permit the amusement club and Banquet Hall proposed by the
appellant, directed the IDA to utilize the land in question after
issuing fresh notification inviting tenders. It was submitted that
the IDA was in fact, favourably inclined to consider the proposal
of the appellants, and the said letter/order indicated mala tides F
on the part of the State Govt. It was further submitted that IDA
was a body corporate under Section 39 of the M.P. Act, and
though section 73 empowers the State Government to give
directions in matters of policy, this power cannot be exercised
to give the directions of the kind contained in the letter dated G
23.9.2003. In this connection it was contended that assuming
that the letter may not be found to be vitiated by reason of
malice on fact, but still it can be held to be invalid if the same
had been issued for unauthorized purpose as it would amount
to malice in law. Reliance was placed in this behalf on the H
412 SUPREME COURT REPORTS [2012] 10 S.C.R.
A proposition in paragraph 40 of the judgment of this Court in
Punjab State Electricity Board Ltd. Vs. Zora singh and Ors.
Reported in 2005 (6) SCC 776.
23. In our view, the appellants have tried to make much
ado about the stand which the IDA took on earlier occasions
8
in favour of the appellants. One has to recognise that where
different authorities are dealing with a particular subject, it is
quite possible that on some occasions, they may take a stand
different from each other, though ultimately it is the decision of
C the competent authority which matters, and it cannot be tainted
with mala fides merely on that count. The following observations
of this Court in para 35 of Jasbir Singh Chhabra & Ors. vs.
State of Punjab reported in 2010 (4) sec 192 are instructive
in this behalf:-
D "35. It must always be remembered that in a
democratic polity like ours, the functions of the
Government are carried out by different individuals at
different levels. The issues and policy matters which are
required to be decided by the Government are dealt with
E by several functionaries some of whom may record
notings on the files favouring a particular person or group
of persons. Someone may suggest a particular line of
action, which may not be conducive to public interest and
others may suggest adoption of a different mode in
F larger public interest. However, the final decision is
required to be taken by the designated authority keeping
in view the larger public interest. The notings recorded
in the files cannot be made basis for recording a finding
that the ultimate decision taken by the Government is
tainted by malafides or is influenced by extraneous
G
considerations ...... "
24. The High Court has held in para 23 of the impugned
judgment that in any case admittedly the license had come to
an end by efflux of time in the month of the June 2010, and
H therefore the validity and legality of the letter/order dated
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 413
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
23.9.2003 had become academic, and it was no longer A
necessary to examine that issue. We cannot find fault with the
High Court on that account, since quashing of this letter cannot
in any way lead to the renewal of the license which had already
expired. Besides, the respondents had valid reasons not to
renew the license as indicated in the show cause notice dated B
8.1.2007. The construction of Amusement Club or a Banquet
Hall could certainly not be a part of a Children's Amusement
Park. The parcei of land was allotted for setting up of a
children's park with games and rides as indicated in the
document of license. Additionally, what was permitted were the c
food and beverages centers, kiosks, shops, administrative
building and toilets, which would be in furtherance of this
objective. The Banquet Hall and an amusement club which
would be used by adults would not fit in the purpose of
Children's Amusement Park. As stated in clause 8 of the show D
cause notice, it clearly indicated that the appellants did not want
to run the activity related to the Children's amusement park on
the land allotted.
25. (i) It was submitted on behalf of the appellants that they
had made good investment in the concerned parcel of land with E
legitimate expectations, and, therefore, the respondents were
estopped from discontinuing their allotment on the basis of the
doctrine of promissory estoppel. This submission was disputed
by Shri Vikas Singh, learned senior counsel appearing for IDA.
He ,firstly, pointed out that more than half of the land remained F
un-utilised even 12 years after the allotment, and, in fact, the
park was not functioning for quite sometime. The games and
rides which were placed on this parcel of land were in the nature
of fixtures, and not permanent additions as such, and could be
removed therefrom when the appellants were required to G
vacate.
(ii) Having noted these submissions we are of the view that
since the document of allotment was a license and not one
creating any interest, the provision of renewal contained therein
H
414 SUPREME COURT REPORTS [2012] 10 S.C.R.
A cannot be read as laying down a mandatory requirement.
Besides, as stated above, clause 14 of the document of license
clearly stated that in the event of violation of any of the terms
and conditions on the part of the licensee, the decision of the
Chairman of IDA was final. Para 7 of the show cause notice in
B fact stated that the necessary action to establish the Children's
Amusement Park had not been taken since half of the land had
remained undeveloped, and it amounted to violating the
conditions of license. The doctrine of promissory estoppel can
certainly not be permitted to be invoked on such a background.
c 26.(i} The appellants had made one more prayer namely
to quash and set aside the notification dated 19.11.2003.
Section 23-A of the M.P. Act permits the modification of the
provisions in the development plan by following the due
procedure of law as laid down therein. In the instant case, a
D notification had been issued earlier on 9.3.2001 inviting the
objections to the proposed modification. The appellants were
heard with respect to these objections, and thereafter the
notification dated 19.11.2003 had been issued approving the
proposed modification. It was contended on behalf of the
E appellants that the modification was a motivated one. The
appellants submitted that under the modification, a parcel of
land in nearby vicinity which was earlier reserved for a green
area, was now being permitted for a commercial use, whereas
the user of the land which was marked for the Children's
F Amusement Park, was being changed to a regional park. This
was with a view to accommodate the constructions which had
come up on the other parcel of land in the vicinity.
(ii} In this connection we must note that the appellants had
G not joined any of those parties for whose benefit this change
had been allegedly made. As held in Girias Investment (P) Ltd.
vs. State of Kamataka & Ors. reported in 2008 (7) SCC 53, in
the absence of factual basis, the court is precluded from going
into the plea of malafides. As far as the land meant for the
H Children's amusement park is concerned, the same was hardly
MANGAL AMUSEMENT PARK (P) LTD. & ANR. v. 415
STATE OF MADHYA PRADESH [H.L. GOKHALE, J.]
put to the full use. In as much as this entire parcel of land of A
about 7 acres was not utilized, and since it was an open parcel
of land, there was nothing wrong in the State Government
deciding to retain it as an open parcel of land, and to change
the land-use thereof from commercial to a regional park. The
notification cannot be faulted on that count either. B
27. In the circumstances, we do not find any error in the
impugned judgment of the High Court. The appeal is therefore
dismissed. Parties will bear their own costs.
B.B.B. Appeal dismissed. C
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