Summary
The Supreme Court set aside a Bombay High Court direction to the Municipal Corporation of Greater Mumbai to convey Block-A of a Poorer Classes Accommodation Scheme plot to the lessee mill company. Neither the 1927 Board resolution nor the 1928 lease bound the Corporation to convey. Read harmoniously with Section 48(a), Section 51(2) of the Bombay Improvement Trust Transfer Act, 1925 confers only a contingent right, and the lessee never paid the cost of conveyance. The writ petition, filed 61 years after the lease expired and after letting the suit limitation under Section 527 of the 1888 Act lapse, was also barred by delay and laches.
Issues
- Whether the Board resolution of 31.05.1927 or the lease deed of 03.10.1928 obliged the Corporation to convey Block-A to the lessee on expiry of the 28-year lease.
- Whether Section 51(2) of the Bombay Improvement Trust Transfer Act, 1925, read with Section 48(a), imposes an unconditional duty to convey the leased premises, and what 'at his cost' requires.
- Whether the writ petition filed in 2016, for a cause of action arising in 1955, was barred by delay and laches, particularly where the lessee had issued a notice under Section 527 of the Mumbai Municipal Corporation Act, 1888 but never filed a suit.
Provisions considered
- Section 51(2), Bombay Improvement Trust Transfer Act, 1925'Shall convey ... at his cost' was read not as an unconditional command but as a right to conveyance contingent on the lease terms, absence of default and payment of the cost, which includes conversion, stamp and registration charges; the lessee had paid none of these. (¶¶ 28, 45, 46, 47, 48, 49, 50, 52, 53, 54)
- Section 48(a), Bombay Improvement Trust Transfer Act, 1925The lessee's duty to keep and leave the demised premises in good repair at the end of the lease is a substantive condition; reading Section 51(2) as overriding it would make it a dead letter, so the two were harmonised. (¶¶ 28, 45, 46, 47, 48, 49, 52)
- Sections 32B to 32I, City of Bombay Improvement Act, 1898Set out the Poorer Classes Accommodation Scheme under which the plot was acquired and leased; Section 32I(2) had provided for vesting in the employer on determination of the lease without default, which the 1925 Act replaced with a conveyance at the lessee's cost. (¶¶ 2.1, 2.2, 27, 28, 31)
- Section 527, Mumbai Municipal Corporation Act, 1888Requires notice before a suit against the Corporation and a suit within six months of the cause of action; the lessee gave notice in 2006 but never sued, and its writ petition ten years later was a device to escape this limitation. (¶¶ 29, 56, 63)
- Article 226, Constitution of IndiaRelief in writ jurisdiction on a cause of action in the remote past is governed by laches; unexplained delay beyond the limitation for the alternative suit is ordinarily unreasonable, and the High Court erred in entertaining the petition. (¶¶ 56, 57, 58, 63)
Held
- The Board Resolution No. 325 of 31.05.1927 approved a lease of Block-A only on the terms in paragraphs 2 and 4 of the lessee's letter and did not accept paragraph 6, which sought conveyance of Block-A as freehold at the end of the lease; the reference in paragraph 4 to a conveyance of 'this land' concerned the five-foot sewer strip, not Block-A. The High Court misread the resolution. (¶¶ 40, 41, 42, 43, 44)
- The lease deed of 03.10.1928 contains no covenant to convey Block-A on expiry; the High Court wrongly treated the recital of the lessee's alteration request as a term of the lease. (¶¶ 36, 37, 38, 44)
- No provision of a statute should be rendered nugatory; Sections 48(a) and 51(2) of the 1925 Act must be read harmoniously, so that the lessee's duty to restore the premises at the end of the lease stays intact and the right to conveyance under Section 51(2) is contingent, not automatic, arising only where the lease terms and statutory framework support it. (¶¶ 45, 47, 48, 49, 50, 51, 52)
- Neither the statute nor the lease imposed an obligation on the Corporation to convey, and no vested right to conveyance arose on expiry of the lease. Even assuming such a right, 'at his cost' in Section 51(2) covers the charges for conversion to freehold, including stamp duty and registration, and the lessee neither paid them nor sued for specific performance or mandatory injunction. (¶¶ 53, 54, 55)
- The lease expired on 31.03.1955; the lessee raised no claim until a Section 527 notice in 2006, did not sue within the six-month limitation, and filed the writ petition in 2016. The High Court dealt with laches cursorily; the petition, a route adopted to circumvent the delay, should have been dismissed on delay and laches alone. (¶¶ 56, 57, 58, 63)
- The lease confined the premises to dwellings for the poorer classes in keeping with the welfare purpose of the 1925 Act; the lessee's attempt to put the land to commercial use without conveyance or payment of cost breached the lease conditions and amounted to an abuse of beneficial legislation. (¶¶ 64, 65, 66, 67, 68, 69)
Result
Appeal allowed; the Bombay High Court's judgment dated 14.03.2022 in W.P. No. 295 of 2017 set aside and the writ petition dismissed; pending applications disposed of.