Calcutta High Court
Paharpur Cooling Towers Ltd. And Anr vs The Board Of Trustees For Syama Prasad … on 2 April, 2026
Author: Jay Sengupta
Bench: Jay Sengupta
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
Present:
The Hon'ble Justice Jay Sengupta
WPO/279/2024
Paharpur Cooling Towers Ltd. and Anr.
Vs
The Board of Trustees for Syama Prasad Mookerjee Port Kolkata and
Ors.
For the petitioners : Mr. Arindam Banerjee, Sr. Adv.
Mr. Chayan Gupta, Adv.
Mr. Raja Baliyal, Adv.
Mr. Victor Chatterjee, Adv.
Mr. Rajarshi Ganguly, Adv.
Mr. Uday Sharma, Adv.
.....Advocates
For respondents : Mr. Subhankar Nag, Adv.
Mr. Ashok Kumar Jena, Adv.
.......Advocates
Heard lastly on : 06.01.2026
Judgment on : 02.04.2026
Jay Sengupta, J:
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1. This is an application under Article 226 of the Constitution of India
challenging the letter dated 05.03.2024 issued by respondent No. 1 and
praying for quashing of the orders passed by the Estate Officer under
Section 5 and 7 of the Public Premises (Eviction of Unauthorised Occupants)
Act, 1971.
2. Learned senior counsel appearing on behalf of the petitioners has
submitted and has relied on the written notes as follows. The fulcrum of the
petitioners’ case is the letter dated 03.12.2021. Apropos the Port’s allegation
was that the petitioner had encroached a portion of the land beyond the
original leasehold, the petitioner had filed a suit being Title Suit No. 503 of
2009 [renumbered as Title Suit No. 89A of 2019] before the Court of learned
2nd Civil Judge (Senior Division) at Alipore claiming delivery up and
cancellation of adverse notices dated 03.08.2006, 05.01.2007 and
22.03.2007 issued by the respondents and declaration that the petitioner is
not encroaching and has never encroached any land belonging to the
respondents and that the respondent is not entitled to claim any sum as
damages/encroachment charges therefore, amongst other reliefs. The
petitioner was enjoying an interim order dated 12.02.2009 directing the
respondents to maintain status quo in respect of use, occupation and
enjoyment of the suit schedule property (including the portion alleged to
have been encroached). The said interim order had been made absolute on
contest by an order dated 30th June, 2011. The respondents have initiated
proceedings under the Public Premises (Eviction of Unauthorised
3
Occupants) Act, 1971 (hereafter, the 1971 Act) against the petitioners
claiming recovery of possession, damages and recovery of alleged due rent.
The said proceedings were allowed by the Estate Officer of the respondent
No.1 by order dated 25th November, 2019, however, making it clear that his
findings were subject to the order of status quo passed by the Learned Civil
Court and his orders would not be executed until the order of temporary
injunction dated 30.06.2011 is in operation. The petitioners filed two
appeals on 11.12.2019 before the Learned District Judge at Alipore being PP
Appeal No.17 of 2019 and PP Appeal No.18 of 2019, respectively. The said
appeals were pending. At this stage, at the instance of the respondents,
there were talks of a comprehensive settlement between the respondents
and the petitioners. A team of the petitioner No.1 engaged in constructive
dialogue with a team of the respondent No. 1. Such process was evinced,
inter alia, by letters dated 16.05.2019, 08.06.2020, 09.09.2020 and
25.08.2021. Thus, the said letter dated 03.12.2021 was an offer on the part
of the respondents for comprehensively settling all disputes between the
parties on the following terms:- (i) You will have to pay compensation @
1XSOR from the date of ejectment till grant of long term lease. This office
has calculated the bills considering 1xSoR which comes to the tune of Rs.
10,76,04,147.07 for the period upto 30.11.2021. As you have already paid
the sum of Rs. 10,98,46,718.60 during this period, there is no outstanding
at present as per the above calculation on 1XSOR, as approved by the
appropriate authority of SMP, Kolkata; (ii) You will have to pay damages for
encroachment for the permanently encroached area, found to be msg about
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2556.47 sq.mtrs (considering the area msg about 401.341 sqm and 267.561
sqm under plate Nos. D-157-3 & D-157/4 respectively are within the said
encroached area) from 01.09.1991 till grant of long term lease @ 4XSOR.
The encroachment damages calculated upto 30.11.2021, is
Rs.7,61,30,890/- (Rupees seven crore sixty one lakhs thirty thousand eight
hundred ninety only) including GST @ 18%; (iii) The licence fee paid under
the Plate Nos.D-157/3 & D-157/4 will be adjusted against the
encroachment fee and past dues, if any; (iv) You will require to withdraw all
the Court cases filed by you in different Courts of law against SMP, Kolkata
and will also be required to pay the cost of litigation incurred by KoPT which
amounts to Rs. 1,05,935/ upto 16.05.2019 to SMP, Kolkata. Upon you
acceptance of the above conditionalities and payment of the above requisite
charges, the matter shall be placed before the SMP, Kolkata Board regarding
grant of long term lease through tender cum auction, extending FRR to you.
Please note this is not an assurance/guarantee from SMP, Kolkata for
grating you lease of the above premises. The said offer was accepted by the
petitioner No.1, giving rise to a concluded executory contract. The
acceptance of the said offer by the petitioners is evinced by the following
steps taken by the petitioner No.1 in aid of the said executory contract:- (i)
The petitioner No.1 deposited a sum of Rs.6,46,79,120/-by cheque under
cover of its letter dated 27.12.2021, deducting a sum of Rs.50 lakh from the
amount demanded, since the said sum had already been paid in 2012; (ii)
The petitioner No.1 unconditionally withdrew the said pending suit and the
two aforesaid pending statutory appeals; (iii) The petitioner No. 1 paid a sum
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of Rs. 1,05,935/-by cheque dated 10.02.2022 towards the legal expenses
incurred by the respondent No.1; (iv) At the instance of the respondents,
pursuant to the respondents’ letter dated 08.03.2022, the petitioner No.1
deposited a further sum of Rs.50 lakh by way of a cheque dated 02.03.2022;
(v) The petitioner expressed readiness and willingness to make payment of
the sum of Rs.97,45,352.59 as alleged encroachment charges for the period
December, 2021 to January, 2023, while requesting the respondent No.1 to
consider some relief. The respondents also acted on the basis of the said
contract in the following manner:- (a) Accepted the sum of Rs.4,64,79,120/-
and the further sum of Rs.50 lakh paid by the petitioners in terms of
paragraph 4(i) and 4(iv) above; (b) By email dated 29.03.2022, the
respondent No.1 gave the petitioner liberty to choose from the empanelled
valuers of such respondent for valuation of the existing structures for the
purpose of fixation of reserve price for the proposed tender process; (c) The
respondent No.1 accepted the petitioners’ choice of valuer communicated by
the petitioner by email dated 2nd May, 2022; (d) The respondent No.1
communicated the work order of valuation given to the expert chosen by the
petitioner No.1, by email dated 12.05.2022 sent to the petitioner No.1; (e)
The respondent No.1 communicated that the inspection for ascertainment of
valuation would be held after 16.05.2022. This was done by the said email
dated 12.05.2022 of the respondent No. 1; (f) The respondent No.1, by its
email dated 24.05.2022, communicated the valuer of the structures lying
inside the premises and requested the petitioner No.1 to accept the said
valuation report; (g) The respondent No.1 by letter dated 05.01.2023 sought
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payment of the alleged encroachment fees of Rs.97,05,352.59 from the
petitioner No.1. Suddenly, 14 months after the previous leg of
correspondence, the respondent No.1 issued a memo dated 05.03.2024
setting completely new terms and conditions for regularisation of the
tenancy of the petitioner No.1 which are as follows:- i) You have to pay a
sum of Rs. 7,09,26,394.18 (Rs. 14,70,57,284.18- Rs. 7,61,30,890.00) being
the amount of encroachment Charges from 01.09.1991 to 30.01.2024
calculated as per time to time SOR and also continue to pay the said
charges upto the date of fresh long term lease; ii) The plot of land msg.
14,220.662 sq.m. will be put up in tender for fresh allotment of 30 years
long term lease through e-tender-cum-e auction by giving FRR to you; iii)
The encroached area msg. 2578.712 sq.m. will be put up in tender for fresh
allotment of 30 years long term lease through e-tender-cum-e auction by
without giving FRR to you; iv) You have to withdraw all court cases filed
against SMPK, if any and payment of legal cost incurred by SMPK if it is
due.” The respondent No.1 while issuing the said letter dated 05.03.2024,
completely ignored the previous material correspondence including the letter
dated 03.12.2021 on the basis of which the concluded contract for
settlement had been arrived at by the parties. Instead, the respondent No.1,
in the said letter dated 05.03.2024, drew reference to a much prior letter
dated 14.03.2019 of the petitioner No.1 requesting for a settlement. The
respondent No.1 acted as if the subsequent correspondence including the
letter dated 03.12.2021 did not even exist. The grounds of challenge are as
follows. A. Promissory Estoppel: The respondent No.1 had, by the letter
7
dated 03.12.2021 proposed certain terms which were accepted by the
petitioner No.1 and subsequently substantially acted upon by both the
parties. The respondent No.1 had therefore by its positive act and conduct
induced the petitioner No.1 to take steps to the detriment of the petitioner
No.1, and thereafter sought to resile from the stand taken in the letter dated
03.12.2021. This is barred by the principle of promissory estoppel. In this
connection, the following judgments are referred to :- (i) M/S. Motilal
Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh & Ors. reported in
(1979) 2 SCC 409; (ii) MRF. Ltd., Kottayam Vs. Assistant Commissioner Tax
and Others, reported in (2006) 8 SCC 702; (iii) Manuelsons hotels Private
Limited Vs State of Kerela & Ors. reported in (2016) 6 SCC 766; (iv) State of
Jharkhand and Others Vs. Brahmputra Metallics Limited, Ranchi & Another
reported in (2023) 10 SCC 634. B. Legitimate Expectation: Independent of
promissory estoppel and as an additional ground, the petitioners rely on the
doctrine of legitimate expectation. Upon having accepted the terms and
conditions of the letter dated 03.12.2021 and having substantially acted in
terms thereof and expressed their readiness and willingness to act in terms
of the balance obligations of the petitioner No.1 as mentioned therein, the
petitioners had developed a legitimate expectation that the respondent No.1
would take steps to fulfil and fructify the executory contract and bring the
same to its logical conclusion. However, the respondent No.1 by its
subsequent act and conduct have defeated such legitimate expectation of
the petitioner No.1, entitling the petitioner No.1 to relief in view of such
doctrine of legitimate expectation. In this connection, the following
8
judgments are cited :- (i) MRF. Ltd., Kottayam Vs. Assistant Commissioner
Tax and Others, reported in (2006) 8 SCC 702; (ii) Bannari Amman Sugars
Ltd. Vs. Commercial Tax Officer and Others reported in (2005) 1 SCC 625.
No rescission, variation, alteration or novation of a bilateral contract can be
made unilaterally. By the acts and conducts of the parties, the concluded
executory contract containing the terms and conditions as mentioned in the
said letter dated 3rd December, 2021 had come into existence. Steps had
been taken by both the parties in aid and persuasion of the said contract.
Such being the case, it was not open to the respondent No.1 to have
unilaterally resiled from the said contract or from unilaterally suggesting a
fresh set of terms and conditions dehors the earlier contract by the said
letter dated 05.03.2024. It is trite that no contract can be varied, altered or
modified or rescinded unilaterally. The respondent No.1 has, therefore, acted
illegally and unlawfully in doing so. In this connection, the petitioners rely
on the following judgments – CITI Bank N.A. Vs. Standard Charted Bank &
Ors, reported in (2004) 1 SCC 12. D. Action of the respondent No. 1 being
arbitrary, is contrary to Article 14 of the Constitution of India. The
respondent No.1, an Article 12 authority, acted arbitrarily, unreasonably,
whimsically and capriciously in issuing the letter dated 05.03.2024. Such
arbitrariness is contrary to Article 14 of the Constitution of India. In this
connection, reliance is placed on the following judgments:- (i) Comptroller
and Auditor General of India, Gian Prakash, New Delhi & Anr. Vs. K.S.
Jagannathan & Anr. reported in (1986) 2 SCC 679; (ii) Subodh Kumar Singh
Rathour Versus Chief Executive Officer and Others reported in 2024 SCC
9
OnLine SC 1682; (iii) M.P. Power Management Company Limited, Jabalpur
Vs. SKY Power Southeast Solar India Private Limited & Ors. Reported in
(2023) 2 SCC 703. Constitutional guarantees under Article 19(1)(g), 21 and
300A of the Constitution of India have been breached by the respondent No.
1. By the aforesaid unlawful actions, the respondent No.1 has infringed the
rights of the members and shareholders of the petitioner No.1 as also those
of the petitioner No.1 as guaranteed under Article 19(1)(g) of the
Constitution of India and also infringed the rights of such members and
shareholders as guaranteed under Article 21 thereof. The respondent No.1
has also unlawfully infringed the right to property of the petitioner No.1 as
guaranteed under Article 300A of the Constitution of India. In this
connection, reliance is placed on the following judgments:- (i) K.T. Plantation
Privet Limited & Anr. Vs. State of Karnataka reported in (2011) 9 SCC 1. The
respondent No.1 being an authority under Article 12 of the Constitution of
India could not have acted in such a fashion. The respondent No.1 is an
authority under Constitution of India and is expected to act fairly,
reasonably and transparently and in a bona fide manner in all its dealings,
including the dealings in connection with contractual matters. Such acts
and actions do not behove an authority under Article 12 of the Constitution
of India. In this connection, the following judgments are relied upon :- i)
Dwarkadas Marfatia & Sons. Vs. Board of Trustees of the Port of Bombay
reported in (1989) 3 SCC 293. Tabular traverses of the respondent’s main
arguments:
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Purported defences of the Response of the petitioners:
respondents:
(i) That the instant writ petition is (i) The law is well settled that
not maintainable since the same arbitrary, highhanded, malafide and
arises out of a contract; unreasonable actions of the State or
authorities under Article 12 of the
Constitution of India even in
contractual matters, are subject to
judicial review under Article 226 of
the Constitution of India. Actions of
such authorities prior to, during the
subsistence of and upon the
conclusion/termination of contracts
can all be scrutinised by judicial
review under Article 226. [See
Unitech Limited & Others Vs.
Telangana State Industrial
Infrastructure Corporation (TSIIC)
(2021) 16 SCC 35].
(ii) That the instant writ petition (ii) Since the action of the authorities
could not have been entertained in are arbitrary and violative of Article
view of the alternative remedy of suit; 14 of the Constitution of India and
have resulted in breach of the
fundamental freedom under Article
19(1)(a) of the members and
shareholders of the petitioner No.1,
amongst other Constitutional
provisions, the instant writ petition
is maintainable and entitled to be
entertained, heard and decided on
merit. In any event, a suit being a
time-consuming process, the same
cannot be considered to be any
alternative efficacious remedy.
Further and in any event, since no
trial would be necessary for
adjudication of the factual questions,
there is no requirement of the matter
being relegated to a suit. Pertinently,
the Hon’ble Supreme Court has
mandated that a writ court would
not mechanically relegate a
11
contractual matter to a suit but
would examine whether the relief
claimed can be granted within the
jurisdiction itself. [See Unitech
Limited & Others Vs. Telangana
State Industrial Infrastructure
Corporation (TSIIC) (2021) 16 SCC
35].
(iii) There was no concluded contract (iii) The acts and conduct of the
between the parties and as such the parties clearly show the creation of
writ would not lie in any case; an executory contract. The said letter
dated 03.12.2021 was an offer of the
respondent No.1 and the petitioner
No.1 accepted the said offer and took
steps in terms of the said letter. This
results in formation a concluded of
executory contract. It is settled law
that formation of a contract need not
take place only by a single bilateral
or multilateral written document
between parties. Such formation can
be inferred from the exchange of
letters and correspondence and the
surrounding circumstances as well
as the acts and conducts of the
parties. From the materials, it is
clear that a concluded executory
contract had been entered into by
and between the parties despite
there not being any bilaterally
executed document showing the
same. (See Trimex International FZE
Ltd. v. Vedanta Aluminium Ltd.
(2010) 3 SCC 1).
(iv) The schedule of rates on which (iv) The schedule of rates relied upon
he respondent No. 1 has relied upon in the 05.03.2024 letter may be
in the letter dated 05.03.2024 are statutory and that may be for
statutory and thus binding on the regularisation of tenancy. However,
petitioner; the aforesaid concluded contract
between the parties was for grant of
first right of refusal to the petitioner
No. 1 in the future tender process for
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grant of lease. The respondent No. 1
cannot resile from the said
concluded contract by making a
different offer for a purported action
of regularisation different from the
original contract.
(v) The instant writ petition involves (iv) The issues of facts involved in the
highly disputed questions of facts instant writ petition can be easily
which cannot be adjudicated under decided from the pleadings along
writ jurisdiction; with the documents exchanged
between the parties. All the
documents exchanged between the
parties are admitted documents. The
transaction is absolutely clear from
the said documents. There is, as
such, no question of any highly
disputed questions of facts being
present which would require
adjudication by trial on evidence. As
such, the dispute involved can be
well gone into and adjudicated in
writ jurisdiction. [See M.P. Power
Management Company Limited,
Jabalpur Vs. SKY Power Southeast
Solar India Private Limited & Ors.
Reported in (2023) 2 SCC 703].
(vi) Section 49 of the Major Port (vi) The said Section 49 does not
Trust Act would apply to save the prevent the SLP from agreeing to a
second letter; compromise/settlement on terms for
giving a party the first right of refusal
in a tender process for grant of lease.
In order to successfully exercise such
right, the petitioner No. 1 would
obviously have to overtake the
highest bid by matching rates equal
to or higher than the minimum
statutory rate.
3. Learned counsel appearing on behalf of the respondents has
submitted and has relied upon the written notes as follows. The writ
13
petitioners by filing the writ petition have challenged the letter dated
05.03.2024 and also asked for quashing of the orders passed by the Estate
Officer under Sections 5 and 7 of the Public Premises (Eviction of
Unauthorized Occupants) Act, 1971. The petitioner no. 1 was a Lessee in
terms of the Lease Deeds dated 1956 and 1971. The Leases, however, were
expired in the year 1986 and 1991 due to efflux of time. The main dispute
between the parties is in respect of the encroachment made by the writ
petitioners and the damages to be charged in respect of such disputed land.
The writ petitioner no. 1 has encroached an area of 3500 Sq. Mtr. without
there being any authority of law. Such fact would be evident from the writ
petition whereby it has been clearly and categorically stated by the
respondents that as the petitioners have encroached the property and they
are liable to pay damages. As stated hereinabove, after expiry of the lease,
eviction and damages proceedings under Sections 5 and 7 were initiated
against the writ petitioner no. 1. Eviction order and order of damages were
duly passed by the Estate Officer on 25.11.2019. It will appear from the
order at page 231 that the eviction order was passed due to expiry of the
lease and also due to illegal encroachment of the property belonging to the
respondents. It will also appear that an order of damages was also passed.
Challenging such order, the writ petitioners filed appeal under Section 9 and
has also filed a suit. While the aforesaid proceedings were pending, talks of
settlement started between the parties. Offer of settlement was given by the
respondents at page 266 of the writ petition dated 12.10.2021 wherein for
damages on account of encroachment 4 X SoR (scale of rate) was calculated
14
and certain terms and conditions were also mentioned. However, by issuing
further letter the respondents demanded further amount on account of
encroachment which led to the present dispute. Case of the Petitioners: –
The case of the petitioners is that there was an offer given by the
respondents vide letter dated 16.05.2019. In terms of such offer, the
respondents have performed their obligations including payment of amount
mentioned as well as withdrawal of Section 9 proceedings pending before the
Civil Court also withdrawn suit. In view thereof, there was a concluded
contract and the respondents are duty bound to act in terms of such
concluded contract. As the petitioners have not only paid the amount but
also withdrew pending cases, now they are remediless and therefore they
have the right of promissory estoppel as against the respondents. It is also
submitted that the respondent authority being an Article 12 authority
cannot resile from concluded contract and promises made thereof. The writ
petitioners, therefore, have prayed for the reliefs mentioned in the writ
petition. They have also relied on judgement of Supreme Court reported in
2024 SCC On-line SC 1682. By referring such judgement, it is urged that
they have the right of promissory estoppel and under judicial review this
writ court has power to pass orders they have prayed for in the writ petition.
Case of the respondents: – The dispute revolves around letter dated
03.12.2021. Although it has been claimed that final offer was given by the
respondents. However, it will clearly appear from the language of such letter
that the offer given is undoubtedly conditional. The important portion of the
letter is reproduced hereunder: – “Upon your acceptance (not performance)
15of the above conditionalities and payment of the above requisite charges
(mandatory) the matter shall be placed before SMP (not final), Kolkata Port
regarding grant of long term lease through tender-cum-auction extending
FRR to you. Please note that this is not an assurance guarantee from SMP,
lease of the above Kolkata for granting you premises.” (emphasis supplied).
Therefore, it is clear from the offer given that it is a conditional offer. It has
been clearly stated that “the matter shall be placed before SMP for regarding
grant of long term lease”. It has also been stated clearly and categorically
“Please note that this is not assurance/guarantee from SMP, Kolkata, for
granting you lease of the above premises”. Thus, the contentions of the
petitioners are completely incorrect. Even otherwise the letter clearly stated
that upon “your acceptance of the above conditionalities and payment of
aforesaid requisite charges”. Therefore, the writ petitioner no. 1 was to make
payment and to accept the conditions mentioned in such letter. There was
no obligation on the part of the writ petitioners to withdraw the legal
proceedings without receipt of final sanction. The legal proceedings therefore
withdrawn at the cost and peril of the writ petitioners may be on incorrect
legal advice or without properly reading the conditions mentioned therein.
For faults committed by the writ petitioners, right cannot accrue in favour of
the writ petitioners. It is reiterated that the offer given vide letter dated
16.05.2019 is a conditional offer and therefore no right can be accrued in
favour of the petitioners. On almost same facts and circumstances this
Hon’ble Court has decided that a conditional offer even complied with does
not create right in favour of the petitioners. The respondents relying on an
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unreported judgement of this Hon’ble Court in W.P.O. no. 1134 of 2007
(M/s. Vijaysree Industries Private Limited & Anr. – Vs -The Chairman,
Kolkata Port Trust & Ors.). In addition to the above proposition of law that
in absence of concluded contract there cannot be any right of promissory
estoppel, the respondents are also urging that inasmuch as the respondents
are Article 12 authority it cannot go beyond binding mandate of the statute.
It is stated the rate of calculation of damages for encroachment was not
done unilaterally but it was done strictly in terms of the statute. The
respondents have disclosed the draft proceedings of the Board wherein it is
clearly stated that damages for encroachment cannot be calculated
prospectively and has to be calculated on the basis of the prevailing rate for
damages for the preceding years. Such fact will be evident from the Affidavit-
in-Opposition. Such document is draft of the proceedings of the Board of the
Respondents where after detailed deliberations decision was taken. The
respondents have also annexed a chart in the Affidavit-in-Opposition and
gave justification why additional rate has been claimed from the writ
petitioners. It will be evident that for diverse period different rates of SoR
have been calculated and claimed from the respondents. Such rate varied
from time to time. The respondents have also disclosed different scale of rate
fixed for damages on account of encroachment under Section 49 of the
Major Port Trust Act, 1963 at the affidavit-in-opposition and therefore, there
is no illegality in claim made by the Respondents. The writ petitioners have
encroached vast area of land of an Article 12 authority and therefore, they
are duty bound to be penalized with damages. In the instant case the writ
17
petitioners are at fault and therefore, they cannot seek equitable reliefs from
this Hon’ble Court. It is the case of the respondents that the scale of rate
fixed by the tariff authority of Major Port Trust under Section 49 is law and
therefore, the respondent authorities are duty bound to follow the same. On
this proposition following judgements are relied on before this Hon’ble
Court: – i) The Trustees of the Port of Madras – Vs – M/s. Amin Chand
Pyarelal & Ors. Reported in 1976 Vol-III SC 167; ii) Board of Trustees of Port
of Bombay – Vs – Indian Goods Supplying Company reported in 1977 Vol.-II
SCC 649. In view of the statutory mandate of the Major Port Trust Act, 1963
and the law decided by the Supreme Court, the respondents, therefore,
being a creature of statute had therefore no option but to claim the damages
on account of encroachment. There is no illegality and as a matter of fact as
the writ petitioner no. 1 is an encroacher, he cannot ask for any relief as the
claim made by the petitioners are illegal and unjustified. The last
proposition of law the respondents wants to humbly urge is that no court or
any tribunal can pass any order or direction contrary to the statutory
provision. It is also the case of the respondents that even if there is fault on
the part of the respondents, there cannot be any estoppel against the statute
and promissory estoppel is an equitable right which cannot go beyond the
statutory prohibition. On this proposition, the respondents rely on a
judgement: – Maharshi Dayanand University -Versus- Surjeet Kaur reported
in (2010) 11 SCC 159. The writ petitioners are encroacher and as per statute
they are liable to pay damages at the statutory rate and they cannot plead
equity or estoppel for fault committed by the writ petitioners themselves.
18
There was no conclusive promise or concluded offer. The offer was
conditional and therefore on the given fact also the writ petitioners cannot
claim that there is a concluded contract. Lastly inasmuch as the
respondents are the statutory authority, it cannot act in violation of the
statute. In view thereof as the writ petitioners are at fault and as the
respondents have committed no illegality, the writ petition is liable to be
dismissed and cost may be imposed on the writ petitioners.
4. I heard the learned counsels for the parties, perused the writ petition,
the affidavits and the written notes of submissions.
5. First, the law is well settled that arbitrary, highhanded, malafide and
unreasonable actions of the State or authorities under Article 12 of the
Constitution of India even in contractual matters, are subject to judicial
review under Article 226 of the Constitution of India. Reliance may be placed
on Unitech Limited & Anr. (supra).
6. Even the existence of arbitration clause or an alternative remedy of
suit cannot be a complete bar against exercise of powers under Article 226
of the Constitution of India. Moreover, it is settled law that a Writ Court
would not mechanically relegate a contractual matter to a suit, but would
examine whether the relief claimed could be granted within the jurisdiction
itself.
7. In Subodh Kumar Singh Rathour vs Chief Executive Officer & Others,
reported at (2024) 15 SCC 461, a Bench of Three Judges of the Hon’ble
Supreme Court, inter alia, held that in that case, the appellant had
challenged cancellation of tender at the instance of the respondent on the
19
ground of arbitrariness and being influenced by extraneous considerations.
Thus, it was not a pure contractual dispute but involved public law element
since calling of tender carried corresponding public duty to act fairly and
reasonably. Hence, the writ petition was found maintainable.
8. The further contention of the respondents was that there was no
concluded contract between the parties and as such, no writ would lie and
no cause of action was made out in the facts of the present case. However, it
appears that the acts were done by the parties in the course of some kind of
an agreement. As contended on behalf of the petitioner, the said letter dated
03.12.2021 was an offer of the respondent No. 1 and apparently the
petitioner No. 1 accepted the said offer and took steps in terms of the said
letter. This would result in the formation of an executory contract despite
there not being a bilateral document. A reference may be made to Trimex
International FZE Ltd (supra).
9. Now, on the question of another preliminary issue about whether
highly disputed questions of fact can be adjudicated under the writ
jurisdiction or not, it was contended on behalf of the petitioner that the
issues of facts involved in the instant writ petition could easily be decided by
hearing along with the documents exchanged between the parties. As such,
there is no question of facts being present that would require trial on
evidence. The facts in question are indeed not so disputed as could not be
dealt with this Court in the writ jurisdiction. A reference may be made in
M.P. Power Management Company Limited, Jabalpur Vs. SKY Power
Southeast Solar India Private Limited & Ors. (supra).
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10. It may be germane to refer further to the factual background that led
to the present litigation. The petitioner is indubitably a reputed business
entity. Since, long it had been operating its business from the main
premises in question. The respondent Port alleged that the petitioner had
encroached upon a portion of land beyond the original leasehold.
Accordingly, the petitioner filed a suit being Title Suit No. 503 of 2009
(renumbered as Title Suit No. 89A of 2019) before the Court of learned 2nd
Civil Judge (Senior Division) at Alipore claiming cancellation of adverse
notices issued by the respondents and declaration that the petitioner shall
not encroach upon any portion of the land. The petitioner was enjoying an
interim order dated 12.02.2009 directing the respondents to maintain status
quo in respect of use, occupation and enjoyment of the suit schedule
property. The said interim order was made absolute on contest by an order
dated 30.06.2011. The respondents initiated a proceeding under the Public
Premises (Eviction of Unauthorised Occupants) Act, 1971 against the
petitioners claiming recovery of possession, damages and recovery of alleged
due rent. The Estate Officer allowed the proceeding by an order dated
25.11.2019, however, making it clear that his findings were subject to the
order of status quo passed by the Civil Court. The petitioner had filed two
appeals. The same were pending. At this stage, the respondents initiated a
comprehensive talk of settlement. Letters were exchanged. By a letter dated
03.12.2021, an offer was made by the respondents for comprehensively
settling all disputes. In view of the payment of a sum of Rs.10 crores 98
lakhs and odd for a period, it was held that there was no outstanding as
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regards payments of compensation from the date of ejectment deal. The
petitioners had to pay damages for encroachment for the permanently
encroached area measuring about 2556.47 sq. mtrs. from 01.09.1991 till
grant of long term lease upto 30.11.2021. The encroachment damages were
calculated as Rs.7crores and 61 Lakh and odd. The licence fee paid would
be adjusted against. The most important condition was, perhaps, to
withdraw the cases filed by the petitioner in different Courts of law against
SMP, Kolkata. A litigation cost was also to be paid. According to the
petitioner, it accepted such offer and took the following steps. The petitioner
No. 1 deposited a sum of Rs. 6 crores and 46 Lakhs and odd under cover of
its letter dated 27.12.2021 deducting a sum of Rs. 50 lakhs as it had
already been paid in 2012. Most importantly, the petitioner No. 1
unconditionally withdrew the said pending suit and the two aforesaid
pending statutory appeals. The petitioner No. 1 also paid a sum of Rs. 7
crores and 5 lakhs and odd towards a legal expense in response to the
respondents’ letter dated 08.02.2022, the petitioner paid a further sum of
Rs. 50 lakhs by cheque dated 02.03.2022. The petitioner further expressed
willingness to make payment of the sum of Rs.97 lakhs and odd as alleged
encroachment charges for the period December, 2021 to January, 2023 and
requested for considering some relief. The respondents accepted the said
sums. Communications were exchanged. Suddenly, about 14 months after
the previous leg of correspondences, the respondent No.1 issued a memo
dated 05.03.2024 setting completely new set of terms and conditions for
tenancy of the petitioner No. 1. The plot of land measuring about
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14,220.662 sq. meter would be put up in tender for fresh allotment of 30
years long term lease through e-tender-cum-e auction by giving FRR to the
petitioner. However, by then the petitioner had to withdraw all Court cases
filed against the SMPK, pay legal costs incurred by the SMPK and pay a sum
of Rs. 7 crores and 9 lakh more as encroachment charges from 01.09.1991
to 30.09.2024 calculated as per the time to time SOR. In effect, a far higher
charge was now to be levied by the respondent authorities upon the
petitioner for the same piece of land.
11. In this context, it is important to consider the expression contained at
the end of the letter of the respondents dated 03.12.2021 that upon
acceptance of the conditions and the payment of the requisite charges, the
matter would be placed before the SMP, Kolkata Board regarding grant of
long term lease through tender cum auction, extending FRR to the
petitioner. This was followed by a rider that it was not an
assurance/guarantee from SMP, Kolkata for granting the petitioner the lease
for the said premises.
12. It is true that the tools of interpretation of statues can hardly be used
to construe the meaning of a letter. However, certain ground norms are
quite settled even if one has to merely understand the plain meaning of a
letter. First, the entire document has to be read as an organic whole.
Secondly, plain or ordinary meaning has to be given to the words and
expressions used. The letter dated 03.12.2021 stipulates payment of huge
sums of money by the petitioners and more importantly, withdrawal of
pending litigations. Out of these, the withdrawal of the suit would be quite
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final. Therefore, these cannot be treated as usual or ordinary conditions
imposable for applying for something. The respondents cannot act naive and
not know that meeting such conditions would have far reaching
consequences. In such conspectus, the pledge of placing of the matter before
the SMP, Kolkata has to be understood more as a formality.
13. In fact, the rider tends to help the petitioners in this regard. It clearly
states that there was no guarantee that the lease would be granted to the
petitioners. It would obviously depend on compliance of the FRR. The said
non-assurance here, therefore, does not relate to the issue of offering the
FRR, but only pertains to the ultimate grant of lease.
14. The scheduled rates which the respondent No.1 relied upon in the
letter dated 05.03.2024 cannot be considered as binding on the petitioner as
sacrosanct for being statutory as the respondents had earlier asked the
petitioner to pay such sum at the prevailing statutory rates of SOR at that
point of time. In fact, substantial sums were paid in this regard. More
importantly, the petitioner was enjoying an order of injunction of status quo,
which was withdrawn on the earlier assurance. Therefore, the respondents
cannot now turn a volte’ face, detract from their earlier offer which was
substantially adhered to and foist further and higher claims. Not only would
these have no semblance of adherence to principles of natural justice and
would violate the basic tenets of promissory estoppel, but these could even
be treated as partaking of elements of fraudulent acts so as to induce a
party by making an offer to take actions at his peril, which cannot even be
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remedied later, and then, to refuse to act on the offer or representation
made earlier.
15. Even, Section 49 of the Major Port Trust Act would apparently not
come to save the second letter as the said provision does not necessarily
prevent the respondent from agreeing to a promise/statement on terms for
giving the party the first right of refusal in the tender process for grant of
lease.
16. What was agreed to be given to the petitioners was only a first right to
refusal (FRR). Therefore, the lessor would not even be prejudiced if such
right is given to the petitioners as per the earlier letter dated 03.12.2021 and
in the prevailing circumstance that the petitioner was running an industry
at the said premises for such length of time.
17. On the other hand, it would be a complete abuse of the process of
Court if the respondents are permitted to take such inconsistent,
contradictory and arbitrary stands at different points of time, thereby
inducing unsuspecting entities like the petitioners to part with valuable
sums of money and even more valuable right to legal remedy and then, to
refuse to perform their part of an executory contract or an agreement quite
akin.
18. In view of the above, for the balance of convenience and in the interest
of justice, this Court hereby quashes and sets aside the letter dated
05.05.2023 issued by the respondent No. 1 and the orders passed by the
Estate Officer under the Act of 1971 and directs the parties to act in terms
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of and in furtherance of the letter dated 03.02.2021 issued by the concerned
respondent earlier.
19. With these observations and directions, the writ petition is disposed
of.
20. Urgent Photostat certified copy of this order, if applied for, be given to
the parties, upon completion of requisite formalities.
(Jay Sengupta, J.)
