Allowed

M/s. Golden Cygnet India Pvt. Ltd. v. The State of A.P.

Andhra Pradesh HC12 Apr 2023WP/31190/2011

Case brief

AI extract

What is this about?

Full Bench of the High Court of Andhra Pradesh, Amaravati allowed a writ petition challenging a notice of lease termination and enhanced rental rates issued by port authorities. The court held that the petitioner could not utilize the full leased land due to existing pipelines and a pond.

What did the court decide?

Notice of termination dated 05.11.2011 set aside; instruction to enter into a ratified lease for the vacant area within three months; liberty to seek lease extension.

M/s. Golden Cygnet India Pvt. Ltd. Vs… — Pension and Retirement Benefits | Andhra Pradesh HC (2023)

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction)

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WEDNESDAY, THE TWELFTH DAY OF APRIL TWO THOUSAND AND TWENTY THREE

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PRESENT

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IL-

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THE HONOURABLE SMT JUSTICE V.SUJATHA

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WRIT PETITION NO; 31190 OF 2011

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Between:

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’■ J.’*.'’y Sri S.N. Raja Plot No 149 J;Hytietabad. loioio. los,

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2. NTNagar,■ ^jahmundry.S®shayyaEast GodavariDirector District.of Petitioner No. 1 R/o. 78-16-15/1 ' Svamala

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...Petitioners

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’ ■ WlS, Hyde^^PD=parttnent, Secotariat

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2- The Director ofPorts, Kakinada Andhra Pradesh.

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’ Secretariat Buildings,^y Hyderabad.Secretary Infrastructure & Investment (Ports-I)'

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The District Collector, Kakinada East Godavari District, Andhra Pradesh.

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...Respondents

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Petition under Article 226 of the Constitution of India praying that in the S™’S?roJSr fi‘«i lherewith, the High Court may be pleased to SrioT r n M I, particularly one in the nature of writ of Mandamus declaring G O.Ms. No.2 dt. 09-01-2009 issued by the respondent No. 3 and the consequential notice of termination of lease dt 05-11-2011 in Prnr Mn H - -hitm^' oLr^^Ar^ and consequently direct the respondents not to levy the 200^10 charges prescribed under the impugned G.O.Ms. No. 2 dt. 09-01unonin th a Wf ^h continue to collect the lease^^echarges lanl ofastheleviedunderandgmundcovenantedpipes “hre extent of Ac. 10.00 as sanctioned and agreed upon in the lease operations°''^"^ petitioners to develop the land for

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LA. NO: 1 OF 2015(WVMP. NO; 3348 OF 2015)

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Between:

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Secretary Transports (Ports-I) Department

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Secretariat Buildings, Hyderabad.

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1. The Director of Ports, Kakinada Andhra Pradesh.

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...Petitioners

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;• S.N. Raja P., No. ’ Nnrra/T’- k ’ DiTcctor of Petitioner No. 1 R7o. 78-16-15/1, Syamala Nagar, Rajahmundry, East Godavari District.

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. The District Collector, Kakinada East Oodavari District, Andhra Pradesh.

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(Respondent Nos. 3 & 4 are not neeessar, parties in this petition) '

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in^ritn orders dtt 29.i..201i in WP.MP.No. 387.^ oXX?lf,„“o;2m ^d'

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LA. NO: 1 OF 2011 fWPMP, NO: 38700 OF 2011)

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mejand admeasuring 10 acres in Plot No. B8 ’in Counsel for the Petitioners^ : SRI O.MANOHAR REDDY Sr. COUNSEL FOR SRI JAVVAJI SARATH CHANDRA

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Counsel for the Respondents 1 to 3: GP FOR TRANSPORT

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Counsel for the Respondent No.4: GP FOR REVENUE

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The Court made the following: ORDER

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THE HON’BLE SMT. JUSTICE V. SUJATHA

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WRIT PETITION No. 31190 of 2011

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ORDER:

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This writ petition came to be filed under Article 226 of the Constitution of India seeking the following reliefs: -

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W.P.No. 31190 of 2011:-

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“....to issue a Writ order or direction more particularly one in the nature of writ of Mandamus declaring G.O.Ms.No. 2 dated 09-01-2009 issued by the respondent No.3 and the consequential notice of termination of lease dated 05-11-2011 in. Proc. No. Dop/D3/1854/2008 issued by the respondent No.2 as arbitrary, illegal, offending Article 14 of the Constitution of India and consequently to direct the respondents not to levy the enhanced rates of lease charges prescribed under the impugned G.O.Ms.No. 2 dated 09-01-2009 to the petitioners and continue to collect the lease charges as levied and covenanted in the lease deed dated 29.04.2008 after duly clearing the land of the under ground pipes upon allotting the entire extent of Ac. 10.00 as sanctioned and agreed upon in the lease deed removing / clearing the pond so as to enable the petitioners to develop the land for operations...”

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2. Brief facts of this case are that the petitioner being a private limited company registered under the provisions of the

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2 .

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Indian Companies Act, 1956 having increased commercial activity relating to off-shore and Port related business and storage etc., have submitted an application to the Government to allot land at Kakinada Port for lease, the Government vide G.O.Ms.No.8 Infrastructure 8b Investment (Ports-I) Department dated 03.03.2008 considering to allot Port land at Kakinada admeasuring to an extent of Ac. 10.00 cents to the petitioner firm. In pursuance of the said G.O, the 1« respondent firm represented by the 2'“’ respondent has executed a lease deed in favour of the petitioner firm for an extent of Ac. 10.00 cents in plot No. B8 in Sy. Nos.274/P 85 249/2P. As per the said lease deed, the tenure of the lease is 30 years and the purpose of the lease was establishing/construction of storage tanks for the storage of edible oils. The lease charges are covenanted to be paid at Rs. 15.25/- per square yard per annum for Ac. 10.00 cents, amounting to Rs.7,38,100/- with the enhancement as prescribed in G.O.Ms.No.l9 and G.O.Ms.No.312 dated 31.01.1994 and 26.11.1994 respectively.

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The grievance of the petitioner firm is that though an extent of Ac. 10.00 cents was sanctioned under the said lease deed, the petitioner firm was allotted only Ac.9.00 cents in the

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said plot. Having regard to the geography and sub-soil characteristics of the subject land was marshy, low lying and saline in nature, the petitioner firm could be immediately taken up for development activities.

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However, when the petitioner firm attempted to undertake the construction activity, on digging the soil, it was found that there were undergoing petroleum and other pipelines installed which were live and being used for supply of fuel to the Port by. the respective Oil Companies. The pipelines were used and continued to be used for pumping the oil received from containers and off-loaded at the pumping house of the Port, to the respective oil depots of the oil companies. Because of which. none of these allottees, could commence the operations for which the land was sought to be allotted.

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Further, there is a pond being occupied in one Acre of land. Cumulatively, the extent of land rendered completely unusable on account of existence of the hazardous oil pipelines to an extent of Ac. 1.50 cents and pond in an extent of Ac. 1.00 cents and as well as deprivation of Ac. 1.00 cents by the Government during allotment itself.

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As the petitioner firm was constrained to use approximately Ac.5.00 cents of land which is certainly not adequate or feasible to carryout the proposed construction/ operation activity, the petitioner firm has made a representation on 20.09.2008 to the 2m respondent bringing to his notice regarding the pipelines as well as pond existing in the said land and requested to clear the land. It is also brought to the notice of the 2nd respondent that only Ac.6.50 cents is existing in view of the above discrepancies and requested to resolve the matter soon and allot rest of Ac.3.50 cents of land at the earliest.

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On receiving the said representation, the respondent instead of considering the case of the petitioner firm for allotting the rest of Ac.3.50 cents, has undertook an exercise of revising lease rent rates for the land leased out at Kakinada Port area and proposals in this regard were received from the 2nd respondent. Basing on which, various options available with the Government were explored.

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Thereafter, the 3rd respondent has issued the impugned G.O.Ms.No.2 dated 09.01.2009 stating that the Government after careful examination of the matter, hereby order for enhancement of the leaec rbntals on Kakinada Port lands from

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Rs. 15.25/- per Sq. yard per annum to Rs. 37.73/- per Sq. yard per annum i.e., Rs. 1,82,613/- per acre per annum for leasing out the Port land for long term of 30 years with a provision for an increase of 15% every three years. Hence, the present writ petition.

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When this writ petition came up for admission on 03.12.2011, this Court has passed the following interim order:-

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“Meanwhile, there shall be an interim direction to the respondents not to dispossess the petitioners from the property in question.”

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The respondents have filed WPVMP. No. 3417 of 2015 and after hearing the case elaborately, this HonTjle Court was pleased to make the interim order absolute while dismissing the WPVMP vide its orders dated 09.02.2016.

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The respondent Nos. 1 and 2 have filed a detailed counter stating that :-

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(1) the land of Ac. 6.98 cents in plot No.B8 which was allotted to the petitioner firm is situated adjacent to ADB Road which is very valuable land nearer to die Kakinada Deep Water Port and many oil companies . are situated near the site. The above land is suitable

(2)

(3)

to take up construction activity i.e., establishing of bulk storage of materials immediately, but not marshy, low laying and saline in nature as stated by the petitioner firm. The Department is taking utmost steps to shift the pipelines to the western most side of the land. The petitioner firm has taken advantage of passing of pipelines and not paid the lease charges for the entire land of Ac. 6.98 leased to them. As per clause 4(2) of Lease deed, the “lessee at his own expenses shall complete, finish, render fit for use of the structure/buildings with all requisite and prescribe standards as per plan approved by the Engineering wing of Port Department with required sewers and drains and other infrastructure conveniences thereon within 6 (six) months from the date of these presents or within such further time as the Lessor grants” even in the land excluding pipeline area.

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But the petitioner firm has not taken up any developmental activities even after a lapse of 3 years. The firm has taken advantage of passing of pipelines and not paid the lease charges on total land, though

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they have remained from time to time and no action was taken by the petitioner firm to develop the land.

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(4) As per clause 3(a) of the lease deed, “the lessee shall pay to the lesser charges /annual lease charge at the rate of 6%-on the land value of Rs. 145/- per Square yard as fixed by the Registration Dept., as revised from time to time Rs. 15.25 Ps. Per Sq. yard (i.e) Rs. 7,38,100/- on Ac. 10.00 cents in advance in one installment with initial EMD equal to 6 months rent to be deposited at the commencement of the tenancy to be adjusted at the end of the tenancy. In respect of revision of ground rent, the Government reserves the right to enhance the rent at any time during the period of lease and the agreement is liable for cancellation, if the lessee is not agreed to pay the enhanced rent when so demanded.

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(5) As the existing lease charges were fixed 13 years back vide G.O.Ms.No. 19 dated 31.01.1994 read with G.O.Ms.No.312 dated 26.11.1994, the Government have enhanced the lease rentals on Kakinada Port land from Rs. 15.25 per Sq. yard per annum to Rs.37.73/- per sq. yard per annum for leasing out

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on long term i.e., 30 years vide G.O.Ms.No. 2 I & I (Ports) Dept., dated 09.01.2009.

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(6)

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Keeping in view the existing market value of the land, the Government have not accepted the re-fixation of lease rentals vide Govt Memo. No. 622/Port.lI/2009 1 8s I(P.II) Dept. Dated 28.10.2011.

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(7)

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It IS further stated in the counter that even the land excluding the pipeline area, the firm has not taken up any developmental activities even after a lapse of three (3) years. The firm has taken advantage of passing of the pipelines in an extent of Ac.4.67 cents and not paid the lease charges on total land though they have reminded from time to time and no action taken by the petitioner firm to develop the land though the pipelines are not coming in the way to take up the developmental activities on the remaining land of Ac. 5.33 cents.

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The learned counsel for the petitioner firm has also filed reply stating as follows;-

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“the respondents making applicable the enhanced lease rent on the ground of escalation in land value for the purpose of a long term lease of 30 years with a provision-for increase in rent by 15% for every 3

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years, making a complete departure from the terms set at only within a year of entering into the agreement cannot be justified in view of impediments faced by the petitioner firm and in the absence of any progress in development works to be under taken. The said G.O, ex facie does not apply to the pre existing contracts as in the instant case, and in any event, constitutes an extraneous circumstances to the terms of contract between the parties, and therefore, could not have been the basis for altering the terms of the contract between the parties.

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It is submitted that the presence of pipelines across the land leased out to the petitioner firm has rendered impossible the commencement of any development work as envisaged in the agreement. The petitioner is entitled to the extent of land granted by way of the lease agreement and the issue of presence of live pipelines under such land poses a grave obstruction to the development of work to be undertaken and also causes uncertainty as to the measure and extent of land. The petitioner cannot be expected to undertake any development work without the resolution of the said issue. In spite of repeated representations, the respondents did not under take the necessary works to remove the pipelines from -the land which is a requisite pre condition for any development to -be undertaken on the land and in view of the default of the-respondents in the subject matter, the petitioner could not be faulted for alleged non-performance of the obligations under the contract.”

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Heard learned Senior Counsel Mr. O. Manohar Reddy representing the learned counsel for the petitioner firm and as well as the learned Government Pleader for the Roads and Buildings appearing for the respondent Nos. 1 and 2.

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It is an admitted fact that though the respondents have entered into the lease deed tvith the petitioner firm for the Port land admeasuring to an extent of Ac. 10.00 cents, but however the land suitable for cartying out the establishing/building storage of edible oils is only an extent of Ac. 6.90 cents, but not the entire land of Ac. 10.00 cents due to the existing pipelines as well as a pond existing in the said land.

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The petitioner’s company has also informed the same to the respondents by way of representation dated 20.09.2008. Immediately after executing the lease deed duly requesting the respondents to allot the rest of the land at the earliest, as the respondents have failed to allot a clear vacant site of the entire extent of Ac. 10.00 cents to the peUtioner firm, the petitioner Ann was not in a position to establish /construct storage tanks in the said land for storing the edible oil. The respondents instead of allotting clear vacant land to the petitioner firm have enhanced the lease rentals from Rs. 15.25/- per square yard

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per annum to Rs.3..73/- per square yard per annum for long time i.e., 30 years with a provision for an increase of 15% for every three (3) years vide G.O.Ms.No.2 Infrastructure 8s Investment (Ports.I) Department dated 09.01.2009.

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It is also the case of the petitioner firm that because of the live pipelines, the petitioner firm could not carryout the construction works and as such the petitioner firm is not liable to pay the enhanced lease amount. Inspite of the same, the 2«<i respondent has issued the impugned notice of termination of lease dated 05.11.2011.

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The impugned order would indicate that an extent of Ac.6.98 cents of Port land was allotted to the petitioner firm on long lease basis for a period of 30 years for establishing the building, such as storage tank, for storing edible oil-but the fact remains that the petitioner firm was leased out an area of Ac. 10.00 cents, but not Ac.6.98 cents.

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Though the petitioner firm has made repeated requests to the respondents for allotting the site as per the lease agreement dated 20.05.2008 instead of considering the same, the respondents have issued the impugned proceedings dated

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05.11.2011 terminating the lease deed and on the other hand, the respondents have enhanced the lease rentals as per G.O.Ms.No.2 dated 09.01.2009. though the said Port land was not put to use. This fact was also admitted by the respondents in the counter that the petitioner firm has not put the land for use and considering the said fact, this Court was pleased to dismiss the WPVMP Hied by the respondents vide order dated 09.02.2016.

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Learned Government Pleader appearing for the respondents have strongly contended that the I— impugned notice was issued only to an extent of Ac.6.98 cents which is a clear vacant site and which should have been used by the pehtioner firm, but not for the entire extent of Ac. 10.00 cents. The said argument of the learned Government Pleader cannot be considered, as it is contrary to the terms and conditions of the lease agreement, in view of the fact that said extent as claimed by the respondent could not be used by the petitioner firm, as there are undergoing live petroleum pipelines installed in an extent of Ac. 1.50 cents and a pond lying m an extent of Ac. 1.00 cents.

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20. The argument of the learned Government Pleader cannot be considered as it is contrary to the terms and conditions of the lease agreement and as well as in view of the fact that even in the extent of Ac. 6.98 cents as claimed by the respondents, the petitioner firm could not take up the construction activity, because of existing undergoing live petroleum and other live pipelines installed which are being used, for supply of fuel to the Port by the respective oil conipanies. When the petitioner firm himself has brought to the notice of the 2"d respondent on 20.09.2008 that they are unable to use the Port land as per the lease deed, the respondents should have allotted the remaining site to an extent of 3.02 cents or else, they should have executed a ratified lease deed by restricting the deed to an extent of Ac. 6.98 cents only. Having fully known that the petitioner firm is unable to use the entire Ac. 10.00 cents of Port land in pursuance of die lease agreement, the respondents have issued the impugned notice on 05.11.2011 which is admittedly illegal, arbitrary and violation of principles of natural justice.

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In view of the same, this court feels it appropriate to allow this writ petition by setting aside the impugned notice dated 05.11.2011 by directing the respondents to enter into ratified

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lease agreement only with regard to the area of vacant land, for the remaining period, as per the terms and conditions of the original lease agreement dated 20.05.2008. with the following directions:-

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(1) The respondents shall conduct a joint survey to the land allotted and leased out to the petitioner firm in the presence of the petitiom er firm duly putting the firm on notice.

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(2) After completion of survey, the respondents shall enter into a ratified lease agreement with the petitioner firm for the extent which can be put to use by the petitioner firm for construction of the storage tanks, on the same terms and conditions of the lease agreement dated 20.05.2008.

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(3) In view of the pendency of the writ petition and in view of the interim orders granted in the said writ petition, though the possession was with the petitioner firm, as the petitioner firm cannot use the land for constructing the storage tanks for which they have entered into lease agreement with the respon^nts, the petitioner firm is at liberty to make

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a fresh application to the respondents seeking extension of the lease period for a further period of 30 years and the said request may be considered by the respondents keeping in view the above observations.

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(4) The entire process of conducting survey and entering into a ratified lease agreement shall be completed withm a period of three (3) months from^ the date of receipt of a copy of this order.

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Accordin^y, this Writ Petition is AUowed. There si,all be

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no order as to costs.

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, „ sequel, miscellaneous application, pending, if any, shall also stand closed. That Rule Nisi has been made absolute as above witness the Hon’ble Sri p- KUMAR MISHRA, The Chief Justi,ee ,h.s Wednesday, The Twelfth day 2^ PRASHANT Thousand and Twenty Three I Two

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Sd/. K. TATA RAO deputy REGISTRAR //TRUE COPY// ~ „ SECTlSv OFFICER

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5. One CC to Sri Jawaii Sarath Chandm District, Andhra Pradesh. ; Scgjgf!:;feSKSSa.. „r,

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RAM Copies merce. High Court ofAndhra Pradesh. [OUT]

HIGH COURT

DATED:12/04/2023

S. • I OCT

ORDER

WP.No.31190 of 2011

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DISPOSING OF THE WP WITHOUT COSTS

M/s. Golden Cygnet India Pvt. Ltd. v. The State of A.P.

Case brief

What is this about?

What did the court decide?

M/s. Golden Cygnet India Pvt. Ltd. v. The State of A.P.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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