02 August 2024 Civil Appeals >> Civil & Consumer Law  

The Supreme Court recently addressed a significant legal dispute involving the City Montessori School and Shri M.M. Batra over a plot of land in Lucknow, known as plot no. 90-A/A-754, measuring 2,238.5 square feet. The plot, which belongs to the State Government, was leased to Gursharan Lal Srivastava in 1961 under a 'garden lease.' Srivastava later sold this leasehold interest to M.M. Batra in 1962.
In 1995, the State Government auctioned the plot, with the City Montessori School emerging as the highest bidder. However, the bid was controversially cancelled in 1996, and the bid from Batra's sons was accepted instead. This led to a legal battle involving the school, the alleged lessee, and the State Government.

Legal Proceedings:

The City Montessori School contested the cancellation of its bid through a writ petition before the Allahabad High Court, which led to a status quo order on the plot and a restraining order against the execution of a sale deed in favor of Batra's sons. The alleged lessee’s suit was dismissed by the Civil Court in 2000, and the appeal, disposed of by the High Court in December 2000, directed the authority to consider the lessee’s application for converting the plot to freehold. The High Court did not interfere with the trial court's findings, except to ensure that any eviction would be in accordance with the law.

In November 2001, the Special Nazul Officer converted the leasehold interest into freehold for Batra upon payment of Rs. 67,022.21, a fraction of the price bid by the school in 1995. This conversion led to further legal action from the school, challenging both the conversion order and the subsequent deed of sale.

Supreme Court's Judgment:

The Supreme Court scrutinized the issues raised and made several key observations:

1. State's Policy on Land Allotment: The Court reaffirmed that any decision by the State regarding land allotment or conversion must adhere to a transparent, fair, and non-arbitrary process. The Court emphasized that actions must be based on a well-defined policy that is publicly accessible and implemented without favoritism.

2. Issue of Fairness in Conversion: The Court criticized the conversion process, noting that the amount charged for converting the plot from leasehold to freehold was significantly less than the bid amount from 1995. This discrepancy pointed to an unfair and non-transparent process.

3. Pending Writ Petition: It was found that the conversion order was made while a writ petition by the school was pending. The High Court had earlier issued an interim order to maintain the status quo and prevent the execution of a sale deed. The Court found that the conversion process was carried out without considering the pending writ petition, and the State Government's action effectively circumvented the interim order.

4. Restoration of Bid: The Court noted that restoring the school's bid from 1995 would be inequitable due to the significant time lapse and changes in property values. Therefore, it did not find merit in restoring the original bid acceptance.

Conclusion:

The Supreme Court upheld the High Court's decision to annul the conversion order and the deed executed in favor of the alleged lessee, citing the lack of fairness and transparency in the process. The Court dismissed both appeals but left open questions regarding the validity of the alleged lessee’s lease and the potential for a fresh auction. The State Government was directed to decide on the plot's future, including whether it could be auctioned again under current policies. The school and the alleged lessee were advised to apply for refunds of their respective payments. This judgment underscores the importance of adherence to fair and transparent processes in the allocation and conversion of state land. It also highlights the need for clear legal procedures to prevent arbitrary decisions and ensure compliance with judicial orders.

  Transfer of Property Act, 1882