Supreme Court of India
STATE OF WEST BENGAL AND OTHERSversusCALCUTTA MINERAL SUPPLY CO. PVT. LTD. AND ANOTHER
- Citation
- 2015 INSC 381
- Decided
- 6 May 2015
- Disposal
- Disposed off
- Bench
- M Y EQBAL
Holding
A transferee is exempt from salami during the unexpired lease term but must pay salami before a fresh renewal after expiry, and the State’s resumption of land held within the ceiling limit is unlawful.
Summary
The Supreme Court examined two appeals arising from writ petitions challenging State actions under the West Bengal Estates Acquisition Act, 1953 and its Rules. In the first appeal, the Court held that Calcutta Mineral Supply Co. had lawfully retained factory land within the ceiling limit and that the State's resumption order was ultra vires, so the High Court's setting aside of the order was affirmed. In the second appeal, the Court considered the amendment to Schedule F of the West Bengal Estates Acquisition Rules inserting clauses 1A and 1B, which imposed a salami of Rs.15,000 per hectare on lease renewals and transfers. It ruled that a transferee is not liable to pay salami during the unexpired period of the lease, but must pay it before a fresh renewal after the lease expires, and that the State’s demand for salami on renewal of the Zurantee tea‑garden lease was valid. Consequently, the High Court’s order quashing the Collector’s demand was set aside. The Court dismissed the appeal concerning Calcutta Mineral Supply and allowed the appeal concerning Darjeeling Dooars Plantations.
Issues considered
- The amendment to Schedule F (clauses 1A and 1B) imposing salami is retrospective for lease renewals and transfers
- Whether a transferee of a leasehold interest is liable to pay salami during the unexpired lease period
- Whether the State may demand salami before a fresh lease renewal after expiry
- Whether land held by Calcutta Mineral Supply Co. falls within the ceiling limit under the West Bengal Estates Acquisition Act and West Bengal Land Reforms Act, rendering the resumption order invalid
- Whether the State's exercise of power under Sections 6(1)(g) and 6(3) of the West Bengal Estates Acquisition Act was lawful
Legislation cited
- West Bengal Estates Acquisition Act, 1953s. 4, s. 5, s. 59, s. 6(1)(g), s. 6(3)
- West Bengal Estates Acquisition Rules, 1954s. Schedule F (clauses 1A, 1B)
- West Bengal Land Reforms Acts. 14Z
Subjects
lease renewalsalamiWest Bengal Estates Acquisition Actland ceilingresumptiontransfer of leasehold interestretrospective legislationstatutory leaseland reforms
Judgment
[2015) 9 S.C.R. 230
A STATE OF WEST BENGALAND OTHERS
v.
CALCUTTAMINERALSUPPLYCO. PVT. LTD.
AND ANOTHER
B
(Civil Appeal Nos. 2548 of 2006)
MAY06, 2015
[M.Y. EQBALAND AMITAVA ROY, JJ.]
C West Bengal Estates Acquisition Rules, 1954 -
Schedule 'F' - Clause 1A and 1B - Transfer of leasehold
interest- Liability to pay salami- Held: In case of transfer of
leasehold interest, the transferree shall not be liable to pay
salami during the unexpired period of lease - However, after
D the expiry of the existing period of lease the transferee shall
be liable to pay salami @ Rs. 15000 per hectare before the
lease is further renewed - West Bengal Estates Acquisition
Act, 1953.
E West Bengal Estates Acquisition Act, 1953: ss.6(1)(g)
and 6(3) - Resumption of land as surplus - High Court set
aside order of resumption - Held: Respondent at all point of
time held the land within the ceiling limit - High Court rightly
set aside resumption order.
F
Disposing of the appeals, the Court
HELD: Civil Appeal No.2549 of 2006
G 1.1. Indisputably, the renewal of lease is a fresh grant
where the principal lease executed between the parties
containing a clause that the lease shall have to be
renewed by giving a fresh grant in accordance with the
said clause. In the instant case, as per clause 16(a) of
H the earlier lease deed, the lease is to be renewed for a
230
STATEOFWESTBENGAL v. CALCUTTAMINERAL 231
SUPPLY CO. PVT. LTD.
further period of 30 years but subject to the rules and A
the terms and conditions of the lease and also such other
terms and conditions as the State Government may from
time to time consider it necessary to impose and include
in such renewed lease. Clause 16(a) further provides
that additional terms and conditions that may be B
considered necessary by the State Government be
included but the same shall not be inconsistent with the
law renewing such lease and shall not have
retrospective effect. The State Government by
notification dated 1.6.1994 brought amendment in the C
Rules by incorporating two more conditions i.e.
paragraph 1Aand 18. As per the additional condition, in
case of fresh lease granted by the State in respect of tea
garden, the lessee shall be liable to pay salami at the
0
rate of Rs. 15,000/- per hectare of the land leased out.
However, paragraph 1-B made it clear that in case of
transfer of leasehold interest, the transferee shall not be
liable to pay salami during the unexpired period of lease,
but after the expiry of the existing period of lease the E
transferee shall be liable to pay salami at the rate of Rs.
15,000/- per hectare before the lease is further renewed.
[Paras 29, 30] [250-B-G]
1.2. Admittedly, before the expiry of the lease in F
question in 1998, the respond1mt/transferee stepped into
the shoes of the original lessee in the year 1990. In 1994,
by notification dated 1.6.1994, an amendment was
brought in Schedule F of the Rules, in terms of clause 1-
B. Therefore, the respondent shall not be liable to pay G ·
salami during the unexpired period of lease up to 1998.
The State Government has rightly not made any claim
for salami for the unexpired period of lease, but for the
fresh renewal of lease after 1998 which is a fresh grant.
The demand of salami by State Government for according H
232 SUPREME COURT REPORTS [2015] 9 S.C.R.
A sanction for renewal of lease cannot and shall not by
any stretch of imagination be held to be retrospective.
The respondent Darjeeling Dooars Plantations is liable
to pay sa/amiwhich is one of the conditions of the Rules
for the purpose of renewal of lease. The demand made
B by the Collector is fully justified. [paras 31, 35] 250-G-H;
251-A-B; 253-D]
Civil Appeal No.2548 of 2006
2. In this case, indisputably the respondent was in
C possession of the land measuring about 4.54 acres
comprised in a factory or mill together with structures
when WBEA Act came into force in 1954. After the said
Act of 1953 came into effect, the company was allowed .
to retain all the lands comprised in the factory by the
D respondent by reason of Section 6(1 )(g) read with
Section 6(3) of the Act as the State Government was of
the opinion that the Company required all the lands for
the purpose of the factory. It is also not in dispute that at
E all point of time the respondent-company was holding
the land of factory within the ceiling limit as provided
under the WBEAAct and West Bengal Land Reforms Ac~.
After coming into effect of the said Act, no order was
passed by the concerned authority against the
F respondent since the land held by it was well within the
ceiling limit. Having regard to the facts of the case of the
respondent and also regard being had to the fact that
the respondent at all point of time held the land within
the ceiling limit, t.he High Court rightly set aside order
G passed by the Special Secretary upholding the notice
issued by the Sub-Divisional, Land and Land Reforms
Officer. [paras 36 to 38] [253-G-H; 254-A-C; 255-F-G]
New Horizons Ltd. vs. Union of India (1995) 1 SCC 478:
H 1994 (5) Suppl. SCR 310; State ofU.P vs. Lalji Tanqon
(2004) 1 SCC 1: 2003 (5) Suppl. S<;:R 77; Gajraj Singh
STATE OF WEST BENGAL v. CALCUTTA MINERAL 233
SUPPLY CO. PVT. LTD.
& ors. vs. State Transport Appellate Tribunal & Ors. A
(1997) 1 sec 650: 1996 (6) SuppL SCR 172; M.C.
Mehta vs. Union of India & Ors. (2004) 12 SCC
118: 2004 (3) SCR 128 - referred to.
Case Law Reference B
1994 '(5) Suppl. SCR 310 referred to. Para 26
2003 (5) Suppl. SCR 77 referred to. Para 32
1996 (6) Suppl. SCR 172 referred to. Para 33
2004 (3) SCR 128 referred to. Para 34 c
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2548 of2006
From the Judgment and Order dated 06.10.2005 of the
Calcutta High Court in W.P.L.R.T No. 180 of2002 D
WllH
Civil Appeal No. 2549 of 2006
Rakesh Dwivedi, Sansriti Pathak, Saakaar Sardana, Anip E
Sachthey for the Appellants .
.Jaideep Gupta, A. K. Ganguli, Utpal Majumdar, Dipak
Kumar Jena, Minakshi Ghosh Jena, Jalandhar Das, Sanjay
Bose, Sangeeta Mandal, Arijit Mazumdar, Vijay Kumar, F
Shantanu Bansal (for Fox Mandal & Co.) for the Respondents.
The Judgment of the Court was delivered by
M. Y. EQBAL, J. 1. These appeals by special leave are G
directed against the common judgment and order dated
6.10.2005 of the Calcutta High Court, whereby Division Bench
of the High Court allowed the writ petitions preferred by the
respondents herein against the decision of the West Bengal
Land Reforms and Tenancy Tribunal (in short, 'the Tribunal') H
234 SUPREME COURT REPORTS [2015] 9 S.C.R.
A dismissing their original applications moved against the
respective order passed by the Government of West Bengal
resuming the lands held by them.
2. By the impugned judgment, the High Court has
B disposed of three writ petitions primarily observing that
although the facts are different there are certain commur.iions
of identity within the question to be answered and certain
common principles of law are involved in the writ petitions.
c 3. In the matter of Calcutta Mineral Supply Co. Pvt. Ltd.
(being Civil Appeal No.2548 of 2006), the respondent-writ
petitioner held the land measuring about 4.54 acres comprised
in a factory or mill together with structures even before the West
Bengal Estates Acquisition Act, 1953 (in short, 'WBEAAct')
o came into force. Factual matrix of this case is that as a result
of notification under Section 4 and effects thereof under
Section 5 of the WBEAAct all the land comprised in factory
vested in the State. However, by reason of Section 6(1)(g)
read with Section 6(3) of that Act, the Company was allowed
E to retain all the lands comprised in factory as the State
Government was of the opinion that the Company required all
the lands for the purpose of the factory.
4. However, in 1996, it came to the notice of the State
F Government that the Company had alienated almost half of
the land and no land was being used for the purpose of the
factory, which remained closed since 1993. In exercise of the
power conferred on it by the proviso to Section 6(3) of the Act,
the State Government by order dated 2"d April, 1996 revised
G the order and resumed 3. 76 acres of land as surplus as in the
opinion of the State Government the company did not require
the land for the purpose of running its factory. The Company
challenged that order by way of a writ petition, which stood
transmitted to the aforesaid Tribunal and was dismissed.
H Aggrieved by the decision of the Tribunal, the Company
STATEOFWESTBENGAL v. CALCUTTAMINERAL 235
SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
preferred writ petition before the High Court. The Division A
Bench of the High Court set aside order of the Tribunal holding
that order dated 2"d April, 1996 was not a speaking order and
directing the State Governmentto consider the matter afresh.
Thereafter, Special Secretary of the State Government passed
speaking order directing resumption of the land allowed to be B
retained by the respondent-Company, This order was
challenged by the respondents, butthe Tribunal dismissed their
application.
5. Aggrieved by the decision of the Tribunal, Company C
again moved the High Court by way of a writ petition, which
was allowed by the Division Bench of the High Court by the
impugned judgment. The High Court quashed the order of
resumption passed by the State Government as also the
judgment of the Tribunal and held that the exercise of power D
under the WBEAAct in the instant case was without jurisdiction
and that the respondents having held land within the ceiling
limit had acquired the status of raiyat with heritable and
transferable right and cannot be subjected to Section 14-Z of
the West Bengal Land Reforms Act. E
6. In the matter of Darjeeling DooarsPlantations (Tea) Ltd.
(being Civil Appeal No.2549 of 2006), the tea estate known
as Zurantee Tea Estate (Zurantee) was leased out by the
Government of West Bengal in favour of Chu Isa Tea Company F
(in short, 'Chulsa') being limited for a period of 30 years on
301h January, 1975. In the record of right prepared under the
WBEAAct, the land was recorded to have been permitted to
be retained under Section 6(3) of the WBEAAct. The original
lease was granted on 1st April, 1924 and expired before the G
WBEAAct came into force. In 1976, Chu Isa sold Zurantee to
Darjeeling Dooars Plantations (Tea) Ltd. (in short, 'respondent-
Company').
H
236 SUPREME COURT REPORTS [2015] 9 S C.R.
A 7. By an order dated 25th August, 1976, the tea estate
was mutated in favour of respondent-Company. In a Company
Petition of 1990, High Court had allowed a scheme of
amalgamation between the respondent-Company, the
transferor, and Karala Valley Tea Co. Ltd. (in short, 'Karala'),
B the transferee, under which Scheme, the name of transferee
Karala was changed to Darjeeling Dooars and all rights, title
and interest of Darjeeling Dooars vested in it. Subsequently
by an order dated 18th November, 1991, the Land Registration
Collector allowed mutation of the name in respect of Zurantee
C in favour of Darjeeling Dooars.
8. The Government of West Bengal issued a notification
on 1st June, 1994 amending Schedule 'F' of the WBEA Rules
inserting Clause 1A and 1B to be incorporated in the lease
D requiring payment of salami of Rs.15,000/- per hectare of land
leased out before further renewal of the lease in cases renewal
was asked for by a transferee allowing the transferee to enjoy
the balance period of the lease transferred. The respondent-
Company applied for the renewal of lease of the Zurantee for
E a period of 30 years on 1Oth March, 1998 and a deed renewing
the lease was executed on 12th March, 1998 in favour of the
respondent-Company. In March, 2002, the Collector
demanded a sum of Rs.1, 10,50,200/- as salami in respect of
F renewal of the said lease pursuant to the amended clause,
which was challenged by the respondent-Company before the
Tribunal. Upon the matter being remanded by the Tribunal,
the Collector again held that the respondent-Company was
liable to pay salami and directed the Company to deposit the
G same. The respondent-Company again moved before the
Tribunal by way of an application, which was dismissed. The
Tribunal upheld the notification imposing salami on transfer of
tea estate. Aggrieved by the order, the respondent-Company
moved the High Court byway of writ petition, which was allowed
H by the Division Bench of the High Court by the impugned
STATEOF WEST BENGAL v. CALCUTTA MINERAL 237
SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
judgment. Holding that the respondent-Company was entitled A
to renewal of the lease without payment of salami, the High
Court quashed the order of the Tribunal as well as the order of
the Collector and the letter of demand.
9. Hence, these two appeals by special leave have been 8
preferred by the State Government and its functionaries under
Article 136 of the Constitution.
10. Now we shall discuss the facts and law applicable
thereto separately for better appreciation of the case of the c
parties.
Civil Appeal No.2549 of 2006
(Collector, Jalpaiguri and another vs. Darjeeling Dooars
Plantations (Tea) Ltd. and another) D
11. Admittedly in the year 1924, the appellant granted a
lease of the property for a period of 30 years, which expired in
1954. The respondent continued in possession till 1974 when
a fresh lease deed was executed on 30.1.1975 in favour of E
Chulsa Tea Company Limited in respect of Zurantee Garden.
The lease was made effective from 25.3.1968. Some of the
terms and conditions of the lease which are relevant in the
present case, are as under:
F
"(4)(a) Thatthe Lessee/Lessees shall at all times observe
and conform to the relevant provisions of the West Bengal:
Estates Acquisition Rules for the time being in force.
(b) That in respect of land comprised in a forest the
Lessee/Lessees shall be subject to the control and G
supervision of the State Government.
. xxxxxx:xx
(13) (a) Thatthe Lessee shall nottransfer, whether in full
or in part, or club or amalgamate tea-gardens without
H
the formal sanction of the Collector;
238 SUPREME COURT REPORTS [2015] 9 S.C.R.
A Provided that except in cases where the provisions of
the West Bengal Alienation of Land (Regulation) Act,
1960 (West Bengal Act XVI of 1960), apply, no such
sanction shall be necessary for equitable mortgage of a
tea-garden with a Scheduled Bank by the deposit of title
B deeds. All such equitable mortgages shall, however, be
referred to the Collector immediately.
(b) That the lease-hold interest shall be heritable.
. c (c) That in the case of a transfer of such lease-hold
interest, whether in full or in part, the same shall be subject
to the provision of any law for the time being in force and
applicable thereto and also subject to prior consent of
the Collector.
D
)()()()()()()()
(16) (a) Thatthe Lessee/Lessees shall be entitled to the
renewal of the lease for a further period of thirty years
and to successive renewals for similar periods, subject
E to the rules and the terms and conditions of this lease
and the such other terms and conditions as the State
Government may from time to time consider it necessary
to impose and include in such renewed lease or leases
and subject further to such rent as may then be fixed,
F
provided that such additional terms and conditions shall
not be inconsistent with the law regulating such lease
and shall not have retrospective effect."
12. From the aforementioned terms and conditions
G contained in the lease deed of 1975, it is clear that the
respondent lessee shall observe and conform to the relevant
provisions of the West Bengal Estates Acquisition Rules for
the time being in force. Clause 13(a) further provides that the
H lessee shall not transfer without the formal sanction of the
Collector and Clause 13(c) provides that the transfer shall be
STATE OF WEST BENGAL v. CALCUTTA MINERAL 239
SUPPLY CO. PVT.LTD. [M. Y. EQBAL, J.]
subject to any law for the time being in force and also subject A
to prior consent of the Collector.
13. Clause 16(a) of the lease deed contains a renewal
clause according to which the lessee shall be entitled to the
renewal of the lease for a further pe_riod of thirty years and to B
successive renewals for similar periods, subject to the rules
and the terms and conditions of this lease and also such other
terms and conditions as the State Government may from time
to time consider it necessary to impose and include in such
renewed lease or leases and subject further to such rent as c
may then be fixed. However, such additional terms and
conditions shall not be inconsistent with the law regulating such
lease and shall not have retrospective effect.
14. Indisputably, during the subsistence of the lease, the D
respondent Darjeeling Dooars Plantations (Tea) Ltd. and the
Karala Valley Tea Company were amalgamated and all the
properties, rights and interest stood transferred to the
respondent Darjeeling Dooars Plantations (Tea) Ltd. by the
order passed by the Calcutta High Court on 31.10.1990 in a E
Company petition. It is also not in dispute that the name of the
respondent Darjeeling Dooars Plantations (Tea) Ltd. was
mutated by the order of the Collector dated 28.11.1991.
15. Originally the lease was granted in the year 1924 for F
a period of 30 years. Before the expiry of the period of lease,
the West Bengal Estates Acquisition Act, 1953 came into force
in the State of West Bengal. According to Section 4 of the Act,
all estates and the rights of every intermediary in each such
estate stood vested in the State free from· all encumbrances G
with effect from the date of notification time to time issued by
the State Government. Section 5 of the said Act deals with the
" effect of the notification. Section 6 of the said Act lays down
the provisions with regard to right of intermediary to retain
certain lands. Section 6 reads as under: H
..
240 SUPREME COURT REPORTS [2015) 9 S.C.R.
A "6. (1) Notwithstanding anything contained in sections 4
and 5, an intermediary shall, except in the cases
mentioned in the proviso to sub-section (2) but subject
to the other provisions of that sub-section, be entitled to
retain with effect from the date of vesting-
B
(a) xxxxxxxxxx
(b) xxxxxxxxxx
(c) xxxxxxxxxx
(d) xxxxxxxxxx
c (e) xxxxxxxxxx
(f) subject to the provisions of sub-section (3), land
comprised in tea gardens or orchards or land used for
the purpose of livestock breeding, poultry farming or dairy;
(g) xxxxxxxxxx
D
xxxxxxxxxx
(2)An intermediary who is entitled to retain possession
of any land under sub-section (1) shall be deemed to
hold such land directly under the State from the date of
E vesting as a tenant, subject to such terms and conditions
as may be prescribed and subject to payment of such
rent as may be determined under the provisions of this
Act and as entered in the record-of-rights finally published
under Chapter V except that no rent shall be payable for
F land referred to in clause (h) or (i) :
Provided that if any tank fishery or any land comprised in
a tea-garden, orchard, mill, factory or workshop was held
immediately before the date of vesting under a lease,
such lease shall be deemed to have been given by the
G
state Government on the same terms and conditions as
immediately before such date subject to such modification lj
therein as the State Government may think fit to make.
(3) In the case ofland comprised in a tea-garden, mill,
H factory or workshop the intermedki1y, or where the land
•
,. STATE OF WEST BENGAL v. CALCUTTA MINERAL 241
SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
is held under a lease, the lessee, shall be entitled to retain A
only so much of such land as, in the opinion of the State
Government, is required for the tea-garden, mill factory
or workshop, as the case may be, and a person holding
under to be an intermediary:
B
Provided that the State Government may, if it thinks fit so
to do after reviewing the circumstances of a case and
after giving the intermediary or the lessee, as the case
may be, an opportunity of being heard, revise any order
made by it under this sub-section specifying the land c
which the intermediary or the lessee shall be entitled to
retain as being required by him for the tea-garden, mill,
factory or workshop, as the case may be.
Explanation:-The expression "land held under a lease"
includes any land held directly under the State under a D
lease.
Exception:-ln the case of land allowed to be retained by .
an intermediary or lessee in respect of a tea-garden, such
land may include any land comprised in a forest if, in the E
opinion of the State Government, the land comprised in
a forest is required for the tea-garden."
16. Reading relevant provisions of Section 6, it is manifest
that an intermediary, in possession of the land including tea
F
garden, shall be entitled to retain subject to the provisions
contained in sub-section (3) of Section 6 of the said Act. Sub-
section 3 very clearly provides that the lessee in possession
of tea garden etc. shall continue and shall be deemed to be an
intermediary. G
17. Section 59 of the WBEAAct empowers the State
.)
Government to frame rules for carrying out the purpose of the
Act. Section 59 of the Act reads as under:
- "Section 59 - Power to make rules H
242 SUPREME COURT REPORTS (2015) 9 S.C.R.
A (1) The State Government may, after previous publication,
make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of
the foregoing power, such rules may provide for all or
B any of the matters which, under any provision of this Act,
are required to be prescribed or to be provided for by
rules."
18. In exercise of the power conferred by Section 59 of
c theAct, the West Bengal EstatesAcquisition Rules, 1954 was
framed and the same was published in the official Gazette.
vide Wotification dated 28.5.1954. Rule 4 of the said Rules
inter alia provides that the land retained by an intermediary
under the provisions of sub-section (1) of Section 6 shall be
o held by him from the date of vesting on the terms and conditions
specified in the Rules. So far as the tea garden is concerned,
it has been specifically provided that an intermediary shall hold
such land on the terms and conditions set out in Schedule F
appended to the Rules. Therefore, for better appreciation,
E Schedule F and the Form-1 for the purpose of granting lease
for tea garden have been reproduced here.
"SCHEDULE F
(Rule4]
F
1. Land comprised in a tea garden retained by an
intermediary under sub-section (1 ), read with sub-section
(3), of section 6 shall be deemed to be held directly under
the State from the date of vesting as a tenant (until a lease
G is granted in Form I appended to this schedule, on such ·
terms and conditions as may be specified by the
(,
Collector in a summary settlement, and thereafter, on a
lease being granted in Form I appended to this schedule,
on the terms and conditions specified in such lease).
H
There shall be a lease in Form I in respect of each such
-
STATEOFWESTBENGAL v. CALCUTTAMINERAL 243
.SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
intermediary, and the same shall be registered and A
numbered in the office of the Collector.
1A xxxxxxxxxxxxxxx
1B XlOOOOOOOOOOOOO
2. The first lease shall be given from the date of the B
order under sub-section (3) of section 6 or from the date
'
of the determination of the rent under section 42,
whichever is later."
19. By Notification dated 1.6.1994 issued by the c
Government of West Bengal, Land & ~and Reforms
Department, an amendment has been brought in Schedule F
to the said Rules discussed hereinabove. By the said
notification, two sub-paragraphs being 1A and 1 B were
inserted, which are reproduced hereunder: D
"1A.When the lease of a tea garden is determined and
the tea garden is leased afresh to a new lessee, the later
shall be liable to pay salami at the rate of Rs.15,000/-
per hectare of the land leased out. E
1B. In case of a transfer of the leasehold interest, except
by way of inheritance, the transferee shall not be liable to
pay salami during the unexpired period of the lease. On
the expiry of the transferred lease, he shall be liable to
F
pay salami at the rate of Rs.15,000/- per hectare of the
land leased out before the lease is further renewed."
20. In Clause (13), sub-clause (dd) was also inserted, which
is quoted hereinbelow:
G
"(dd) That the transferee, other than by inheritance, shall
be required to enter into a fresh lease on payment of
salami at the rate laid down in paragraph 1B of Schedule
F within three months of expiry of the unexpired period of
lease." H
244 SUPREME COURT REPORTS [2015) 9 S.C.R.
A 21. It is therefore manifest that when a lease of the tea
garden is determined by efflux of time and a lease is granted
afresh to new lessee, the latter shall be liable to pay salami at
the rate of Rs.15,000/- per hectare of the land leased out.
Clause 1B also provides that the transferee shall not be liable
B to pay salami during the unexpired period, but on the expiry of
the lease, he shall be liable to pay salami at the rate of
Rs.15,000/- per hectare of the land leased out before the lease
is further renewed.
C 22. Admittedly, the lease of 1975, which became effective
from 1968, got expired in the year 1998. The respondent then
approached the Government for renewal of the lease. The
Collector prepared a lease deed incorporating the terms and
conditions contained in the earlier lease and referred it to the
D Government for final approval. The request of the respondent
for grant of lease was considered by the Government and by
order as contained in letter dated 5.10.2001, addressed to
the District Magistrate & Collector, Jalpaiguri, informed that
the Government will accord post facto approval to the renewal
E of the lease for a further period of 30 years on payment of
salami of Rs.15,000/- per hectare. The letter dated 5.10.2001
is reproduced hereunder:
"Government of West Bengal
F Land and Land Revenue Department
G
H
STATE OF WEST BENGAL v. CALCUTTA MINERAL 245
SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
Sub: Proposal for post-factor approval to the renewal of A
lease of the land comprised in Zurantee Tea Garden in
Jalpaiguri District.
The undersigned is directed to refer to the above subject
and to say that post-facto approval to the renewal of lease
B
of the land comprised in Zurantee Tea Garden for the
period of 30 years in favour of M/s. Darjeeling Dooars
Plantation (Tea) Limited will be accorded after salami
@ Rs.15,000/- per hectare and other dues, if any, are
realized from the concerned Company. Till such post- c
facto approval i.s accorded, renewal accorded by him
will remain inoperative.
He is, therefore, requested to realize all the dues and
report compliance thereof to the Department with the
certificate that there is no arrear dues from the concerned D
companies so as to enable the Govt. in the Land & Land
Reforms Department to accord necessary post-facto
approval as so proposed by him.
He is also requested to furnish the copy of relevant E
documents particularly the copy of the High Court's order
and copy of certificate of incorporation issued by the
Registrar of Companies based on which Mutation case
no. IV-5 of 1991-92 was finalized and mutation was
allowed. F
Sci/-
Deputy Secretary to the Govt. of West Bengal"
23. In pursuance to the decision taken by the State G
Government, an order was passed by the Collector, Jalpaiguri
dated 29.11.2002 directing the respondent to deposit
Rs.15,000/- per hectare as salami at the time of renewal before
according approval of the Land & Land Revenue Department.
The order was communicated to the respondent and the same H
246 SUPREME COURT REPORTS [2015] 9 S.C.R.
A came to be challenged before the Land Reforms and Tenancy
Tribunal. The respondent sought a declaration that the
Notification dated 1.6.1994 and amendments of the Rules in
Schedule F and Form 1 thereto are illegal and unconstitutional.
The said application was rejected by the Tribunal. However,
B by the impugned order, the High Court allowed the writ petition
and quashed the order of the Tribunal.
24. We have heard Mr. Rakesh Dwivedi, learned senior
counsel appearing for the appellant-State and Mr. AK. Ganguli,
C learned senior counsel appearing for the respondent-
Company in Civil Appeal No.2549 of 2006.
25. Mr. Dwivedi assailed the order of the High Court as
being contrary to the facts of the case and mis-appreciating
o the status of the respondent by recognizing it as a lessee and
not as a transferee. Mr. Dwivedi submitted that Clause 1A
and 1B, as inserted by the amendment, will apply on its own
course as even the inclusion of these clauses in the lease deed
is not necessary. According to the learned counsel, Clause
E 16(a) was already there in the previous lease and as per the
said clause additional conditions to the subsequent lease can
be included. Mr. Dwivedi submitted that post facto sanction
by the State Government is a pre-condition for payment of
salami and for that reason the lease deed executed by the
F respondent was signed by the Collector and forwarded to the
State Government for sanction. According to Mr. Dwivedi,
renewal of lease is a fresh one and lessor, namely the State, is
entitled to include additional terms and conditions in the said
document of lease.
G
26. Mr. AK. Ganguli, learned senior counsel appearing
for the respondent, on the other hand contended that the lease
granted to the predecessor-in-interest of the respondent is
statutory lease governed by the Act and the Rules made
H thereunder and unless and until the amendments brought in by
STATE OF WEST BENGAL v. CALCUTTA MINERAL 247
SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
the notification dated 1.6.1994 and incorporated in Form 1, A
salami cannot be realised. According to the learned counsel,
the respondent-Company came into existence much before
the transfer of the leasehold interest, by virtue of amalgamation
and the order passed by the High Court in the Company
Petition. According to Mr. Ganguli, the respondent is in the B
nature of joint venture Company. Learned senior counsel relied
upon decision of this Court in the case of New Horizons Ltd.
vs. Union of India (1995) 1 sec 4 78 and in the case of State
of U.~P. vs. Lalji Tandon, (2004) 1 SCC 1.
c
27. Perusal of the impugned order passed by the High
Court would show that although the High Court took notice of
clause 16(a) of the lease deed and amendment brought in the
Schedule F and Form 1 of the Rules it came to the following
conclusion: D
"22.1. These terms of renewal are clear and unambiguous
and these are terms exactly, which is provided in Schedule
"F" Form-I of the WBEA Rules. In terms of the conditions
contained in Clause 16(a), the State Government/lessor E
was entitled to incorporate additional terms and
conditions consistent with the law regulating the lease
with prospective effect in the renewed lease. This lease
was granted in terms of Rule 4 of the WBEA Rules in
terms of Schedule "F" in Form-I. The State is entitled only F
to incorporate additional conditions in the renewed lease
with prospective effect. Therefore, the amendment, if any,
incorporated in Schedule "F" by reason of the amendment
effective from 1st of June, 1994 would not be effective in
respect of unexpired period of the lease to which the G
Darjeeling Dooars had stepped into. Therefore, under
Clause 16(a) read with Schedule "F", Darjeeling Dooars
was entitled to renewal of the lease on the same terms
and conditions. The amendment brought about could not
H
be given retrospective effect to affect the right of the
248 SUPREME COURT REPORTS [2015] 9 S.C.R.
A lessee/transferee stepping into the shoes of the
transferor-lessee to obtain further renewal of the lease
for further period of 30 years and to successive renewals
for similar periods. The only liberty the State Government
had under the said clause is that it can impose and include
B in the said renewed lease additional terms and
conditions not inconsistent with Rule 4 Schedule "F" and
Form-I of the WBEA Rules without retrospective effect.
22.2. Therefore, the amendment brought about in
c Schedule "F" could be incorporated in the renewed lease
and was so rightly incorporated in the 1998 lease. As
such the conditions so incorporated became part of the
renewed lease and would govern the terms and
conditions of the renewed lease and that too
D prospectively. These additional terms and conditions
incorporated in the renewed lease became effective after
the lease was renewed, namely when the right to renew
the lease was exercised and upon such exercise the right
came to an end and the renewal of the lease being a
E fresh lease, these terms cannot operate to affect a
situation prior to the renewal of the lease. In terms of these
additional conditions, the salami is payable in
consideration of the renewal after the expiry of the
renewed lease containing the terms. A term, which was
F not in existence in the lease sought to be renewed within
the scope of Clause 16(a), could not govern the right of
the lessee to obtain renewal of the right or the State to
impose conditions for renewal on the basis of Clause
16(a) of the 1975 lease, as was held in Delhi
G DevelopmentAuthorityv. Durga Chand Kaushish [1974]
1SCR535.
)()()()()()()()
22.4. The amendment also does not provide that the
H amended clauses would have retrospective operation.
STATE OF WEST BENGAL v. CALCUTTA MINERAL 249
SUPPLY CO. PVT.LTD. [M. Y. EQBAL, J.]
In any event, the terms of the lease cannot be substituted A
even by legislation. No vested right, particularly, in respect
of fiscal or revenue matters already accrued could be
taken away through legislation; neither any legislation in
that respect could be retrospective in operation.
B
Conclusion:
23. In these circumstances, the additional terms
contained in the renewed lease would be effective at the
time of renewal of the renewed lease entitling the State
of demand salami in terms of Clause 1 B from the c
transferee if there is any transfer. However, salami can
be demanded by the State under Clause 1A upon
determination of the lease from the person to whom the
fresh lease is granted after the 1994 Amendment of the
WBEA Rules even if Clause 1A was not incorporated in D
the lease determined.
23.1. In these circumstances, the Government is not
entitled to demand salami in terms of Clauses 1A or 1B
incorporated in the renewed lease as a consideration E
for the 1998 renewal from the Darjeeling Dooars. Such
a demand is inconsistent with the law regulating such
lea~e and cannot be retrospective in effect."
28. We have given our anxious consideration to the F
reasoning assigned by the High Court while arriving at such
conclusion. In our view, the High Court has misconstrued and
misinterpreted the relevant provisions contained in the Rules
viz-a-viz the condition of renewal as contained in clause 16(a)
of the lease deed. The High Court has committed error of law G
in holding that the amendment brought about could not be given
retrospective effect to affect the right of the lessee/transferee
stepping into the shoes of the transferee/lessee to obtain further
.renewal of lease for a further period of 30 years and to
successive renewals for similar periods. The High Court is H
250 SUPREME COURT REPORTS [2015] 9 S.C.R.
A not correct in law in holding that the amended clause would
have retrospective operation.
29. Indisputably, the renewal of lease is a fresh grant where
the principal lease executed between the parties containing a
B clause that the lease shall have to be renewed by giving a
fresh grant in accordance with the said clause. In the instant
case, as per clause 16(a) of the earlier lease deed, the lease
is to be renewed for a further period of 30 years but subject to
the rules and the terms and conditions of the lease and also
C such other terms and conditions as the State Government may
from time to time consider it necessary to impose and include
in such renewed lease. Clause 16(a) further provides that
additional terms and conditions that may be considered
necessary by the State Government be included but the same
D shall not be inconsistent with the law renewing such lease and
shall not have retrospective effect.
30. As noticed above, the State Government by notification
dated 1.6.1994 brought amendment in the Rules by
E incorporating two more conditions i.e. paragraph 1A and 1B.
As per the additional condition, in case of fresh lease granted
by the State in respect of tea garden, the lessee shall be liable
to pay salami at the rate of Rs. 15,000/- per hectare of the
land leased out. However, paragraph 1-B made it clear that in
F case of transfer of leasehold interest, the transferee shall not
be liable to pay salami during the unexpired period of lease,
but after the expiry of the existing period of lease the transferee
shall be liable to pay salami at the rate of Rs. 15,000/- per
hectare before the lease is further renewed.
G
31. Admittedly, before the expiry of the lease in question
in 1998, the respondenUtransferee stepped into the shoes of
the original lessee in the year 1990. In 1994, by notification
dated 1.6.1994, an amendment was brought in Schedule F of
H the Rules, as discussed hereinabove, in terms of clause 1-8.
STATE OF WEST BENGAL v. CALCUTTA MINERAL 251
SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
Therefore, the respondent shall not be liable to pay salami A
during the unexpired period of lease up to 1998. The State
Government has rightly not made any claim for salami for the
unexpired period of lease, but for the fresh renewal of lease
after 1998 which is a fresh grant. The demand of salami by
State Government for according sanction for renewal of lease B
cannot and shall not by any stretch of imagination be held to
be retrospective.
32. In the case of State ofU.P. vs. Lalji Tandon, (2004)
1 SCC 1, this Court while considering the renewal clause in C
the lease deed observed:-
"13. In India, a lease may be in perpetuity. Neither the
Transfer of Property Act nor the general law abhors a
lease in perpetuity. (Mui/a on the Transfer of Properly D
Act, 9th Edn., 1999, p. 1011.) Where a covenant for
renewal exists, its exercise is, of course, a unilateral act
of the lessee, and the consent of the lessor is
unnecessary. (Bakerv. Merckel, also Mulla, ibid., p.1204.)
Where the principal lease executed between the parties E
containing a covenant for renewal, is renewed in
accordance with the said covenant, whether the renewed
lease shall also contain similar clause for renewal
depends on the facts and circumstances of each case,
regard being had to the intention of the parties as F
displayed in the original covenant for renewal and the
surrountling circumstances. There is a difference
between an extension of lease in accordance with the
covenant in that regard contained in the principal lease
and renewal of lease, again in accordance with the G
covenant for renewal contained in the original lease. In
the case of extension it is not necessary to have a fresh
deed of lease executed, as the extension of lease for the
term agreed upon shall be a necessary consequence of
H
252 SUPREME COURT REPORTS [2015] 9 S.C.R.
A the clause for extension. However, option for renewal
consistently with the covenant for renewal has to be
exercised consistently with the terms thereof and, if
exercised, a fresh deed of lease shall have to be executed
between the parties. Failing the execution of a fresh deed
B of lease, another lease for a fixed term shall not come
into existence though the principal lease in spite of the
expiry of the term thereof may continue by holding over
for year by year or month by month, as the case may be."
C 33. In the case of Gajraj Singh & ors. vs. State
Transport Appellate Tribunal & ors., (1997) 1 SCC 650,
this Court while considering the term renewal of lease or
licence contained in document, observed that "grant of renewal
is a fresh grant though it breathes life into the operation of the
D previous lease or licence granted as per existing appropriate
provisions of the Act, rules or orders or acts intra vires or as
per the law in operation as on the date of renewal".
34. In the case of M.C. Mehta vs. Union of India & ors.,
E (2004) 12 SCC 118, a Division Bench of this Court was
considering the question as to the effect of notification in such
case where the lessee claims renewal of mining lease. Some
of the leases were granted for extraction of minerals. In the
mean time, the notification dated 27 .1.1994 was issued by
F Ministry of Environment and Forest, Government of India in
exercise of power conferred by Environment (Protection) Act,
1986 putting a restriction to the grant of mining lease without
the clearance of the State Government in accordance with the
procedure specified in the notification. Rejecting the
G contention made by the lessee this Court observed:-
"77. We are unable to accept the contention that the
notification dated 27-1-1994 would not apply to leases
which come up for consideration for renewal after issue
H of the notification. The notification mandates that the
STATE OF WEST BENGAL v. CALCUTIA MINERAL 253
SUPPLY CO. PVT. LTD. [M. Y EQBAL, J.]
mining operation shall not be undertaken in any part of A
India unless environmental clearance by the Central
Government has been accorded. The clearance under
the notification is valid for a period of five years. In none
of the leases the requirements of the notification were
complied with either at the stage of initial "grant of the B
mining lease or at the stage of renewal. Some of the
leases were fresh leases granted after issue of the
notification. Some were~ cases of renewal. No mining
operation can commence without obtaining
environmental impact assessment in terms of the c
notification."
35. Considering the entire facts of the case and the law
discussed hereinabove, we are of the definite opinion that the
respondent Darjeeling Dooars Plantations (Tea) Ltd. is liable D
to pay salami which is one of the conditions of the Rules for
the purpose of renewal of lease. The demand made by the
Collector is fully justified. The impugned order passed by the
High Court, therefore, cannot be sustained in law.
E
Civil Appeal No.2548 of 2006
(State of West Bengal and others vs. Calcutta Mineral
Supply Co. Pvt. Ltd. and another)
F
36. We have heard Mr. Rakesh Dwivedi, learned senior
counsel appearing forthe appellant"State and also Mr. Jaideep
Gupta, learned senior counsel appearing for the respondent-
company. In this case, indisputably the respondent was in
possession of the land measuring about4.54 acres comprised G
. in a factory or mill together with structures when WBEAAct
came into force in 1954. After the said Act of 1953 came into
effect, the company was allowed to retain all the lands
comprised in the factory by the respondent by reason of
Section 6(1)(g) read with Section 6(3) of the Act as the State H
254 SUPREME COURT REPORTS [2015] 9 S.C.R.
A Government was of the opinion that the Company required all
the lands for the purpose of the factory. It is also not in dispute
that at all point of time the respondent-company was holding
the land of factory within the ceiling limit as provided under the
WBEAAct and \(Vest Bengal Land Reforms Act.
B
37. Mr. Gupta, learned senior counsel, rightly submitted
that after coming into effect of the aforesaid Act no order was
passed by the concerned authority against the respondent
since the land held by it was well within the ceiling limit. The
C High Court, while considering the case of the respondent, came
to the following conclusion:
"28. Once the WBLR Act becomes effective and a person
becomes a raiyat within the meaning of Section 4 thereof,
o he cannot have dual characteristic, one under the WBEA
Act and the other under the WBLR Act. It is not at the
convenience or whims of the State that it will resort to the
provisions of the one or the other Act according to its
own convenience. The law is governed by the statute.
E There is no scope of arbitrariness or whims or caprice in
the exercise of power or discretion, left with the State to
treat a raiyat in a manner that suits the State according
to its own convenience. It is only Section 14Z, which
governs the field and to which the State can resort to.
F The whole exercise of the power under the WBEAAct in
this case is wholly without jurisdiction and the exercise
can no more encroach upon the field governed by Section
14Z of the WBLR Act.
G 28.1. In this case, admittedly, the writ petitioner held land
comprised in mill and factory measuring about 4.54
acres, which is well within the ceiling both under the
WBEAAct and WBLR Act. Therefore, retention of the
e3nd under Section 6(1) could not be subjected to Section
H 6(3) of the WBEAAct, which applies in respect of land
STATE OF WEST BENGAL v. CALCUTTA MINERAL 255
SUPPLY CO. PVT. LTD. [M. Y. EQBAL, J.]
held in excess of the ceiling. Similarly, Section 14Z(2) of A
the WBLRAct applies to land held by a raiyat in excess
of the ceiling. Once the writ petitioner became a raiyat
by virtue of operation of Section 3A read with Section 4
along with the amendment of the definition of land in
Section 2(7) of the WBLR Act with heritable and B
transferable right in respect of land held by him within the
ceiling, there is no scope for application of Section 14Z(2)
of that Act.
Order: C
29. Therefore, the order passed by the Deputy Secretary/
Special Secretary on 20th of July, 2001 (pp. 65-78)
upholding the notice and the notice dated 10th of August,
2001 (pp. 76-77) issued by the Sub-Divisional Land and D
Land Reforms Officer, Barrackpore, for enquiry and
possession pursuant thereto and the order dated 18th
January, 2001 passed by the learned Tribunal affirming
the order passed by the Deputy Secretary being subject-
matter of this writ petition cannot be sustained and are E
hereby quashed. Let a writ of certiorari do issue
accordingly."
38. Having regard to the facts of the case of the
respondent and also regard being had to the fact that the F
respondent at all point of time held the land withih the ceiling
limit, the High Court rightly set aside order dated 29111 July, 2011
passed by the Special Secretary upholding the notice issued
by the Sub-Divisional, Land and Land Reforms Officer.
Therefore, we do not find any reason to interfere with the order G
passed by the High Court so far this case is concerned.
39. For the reasons aforesaid, Civil Appeal No.2549 of
2006 (Collector, Jalpaiguri and another vs. Darjeeling Dooars
Plantations (Tea) Ltd. and another) is allowed and the judgment H
256 SUPREME COURT REPORTS [2015] 9 S. C.R.
A and order passed by the High Court, in W.P.L.R.T. No.288 of
2005, is set aside. Whereas Civil Appeal' No.2548 of 2006
(State of West Bengal and others vs. Calcutta Mineral Supply
Co. Pvt. Ltd. and another) is dismissed. However, there shall
be no order as to costs.
8
Devika Gujral Appeals disposed of.
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