Paragraph numbers below are the court’s original numbering, recovered from the source text.
10. There is a controversy raised by the alleged lessee about whether the application to amend the Writ Petition made by the school to incorporate the challenge to the conversion and the deed was allowed. However, on page 12 of the impugned judgment, the High Court recorded the submission of the learned counsel for the alleged 30 lessee that there was a delay on the part of the school in challenging the order of conversion. The submissions recorded in the impugned judgment show that the parties proceeded on the footing that there was a challenge to the conversion order. The counter filed by the alleged lessee before the High Court shows that it refers to the amended Writ Petition and paragraph 45 of the counter raises a contention of the delay in challenging the conversion deed. Therefore, the argument that the amendment was not allowed need not detain us. ON MERITS
11. Coming back to the facts of the case, the plot was put to auction in 1995. The Special Nazul Officer accepted the highest bid offered by the school of Rs. 8,51,043.15, out of which a sum of Rs. 85,105 was paid along with the tender. We have already stated the facts leading to the cancellation of the highest bid of the school and acceptance of the second-highest bid of the sons of the alleged lessee. It is important to note that the Special Nazul officer passed an order on 26th November 2001, by which the consideration for converting leasehold rights into freehold rights was fixed at Rs.67,022.21. This amount was less than 10% of the bid offered by the school about 16 years before the order dated 26th November 2001. On the face of it, this cannot be a fair and transparent process of transferring the State’s ownership rights.
12. We have perused the judgment of the Civil Court dated 24th July 2000 which dismissed the suit filed by the alleged lessee. The Trial Court held that the alleged lessee was not entitled to the benefits of G.Os. dated 17th February 1996 and 1st December 1998. In the suit, the alleged lessee sought conversion from leasehold to freehold based on these two G.Os. All findings were recorded against the alleged lessee except the finding that he was in possession of the plot. Being aggrieved by the decree of dismissal of the suit, the alleged lessee preferred First Appeal No.81 of 2000. The appeal was disposed of by the order dated 6th December 2000. The said order makes an interesting reading. The High Court heard the counsel for the alleged lessee, the authority, and the State Government. The first paragraph refers to the appearances of the learned counsel. The second paragraph gives the facts in brief. The same paragraph also notes that the alleged lessee sought the relief of mandatory injunction for the grant of conversion in terms of the G.Os. dated [2024] 8 S.C.R. City Montessori School v. State of U.P. & Ors. 17th February 1996 and 1st December 1998 and that the Trial Court declined to grant the said relief. The further paragraphs of the said order, which are relevant, read thus: “…………………………………… During the course of hearing learned Counsel for the Parties agreed that in case the Plaintiff makes an application to the Vice Chairman of the Lucknow Development Authority, Respondent No. 3, in terms of the Government Orders dated 17.2.1996 and 1.12.1998, the same shall be considered by the Vice-Chairman, Lucknow Development Authority in accordance with law expeditiously. It was further stated on behalf of the Respondents that they shall not evict the Plaintiff from the property in question except in accordance with law. In this view of the matter, although we do not consider it expedient to interfere in the findings recorded in the Trial Court, yet in view of the statements made at Bar, the Vice-Chairman, Lucknow Development Authority has to consideration application of the Plaintiff for conversion of leasehold into Freehold rights in respect of the Garden Lease in question and pass appropriate order expeditiously and it goes without saying that the Respondents entitled to evict the Plaintiff-Appellant, as stated by them only in accordance with law. Subject to these observations, the Appeal is dismissed. No order as to costs.” (emphasis added)
13. Thus, only the statements of the parties were recorded, and it was observed that the authority would have to consider the application made by the alleged lessee for the conversion of leasehold rights into freehold rights and to pass appropriate orders expeditiously. It is important to note that the High Court specifically recorded that it did not interfere with the findings recorded by the Trial Court. Subject to the direction to consider the application made by the alleged lessee to the authority for conversion in accordance with the law, the appeal preferred by the alleged lessee was dismissed. There was no binding order passed by the High Court giving a mandate 32 to the authority or to the State Government to grant the application which the alleged lessee may make for conversion. On the contrary, the High Court upheld the decree passed by the Trial Court, which held that the alleged lessee was disentitled to the benefit of G.Os. issued in 1996 and 1998.
14. The order dated 26th November 2001 does not refer to any G.O. under which conversion was permitted. The conversion was allowed against payment of the consideration, which was less than 10% of the price offered in a public auction, 16 years back. Therefore, we agree with the High Court that the order was illegal. There is another aspect of the matter. When the aforesaid order and the order of conversion were passed, the Writ Petition filed by the school was pending. The alleged lessee’s sons were parties to the Writ Petition. After hearing all the parties, on 18th July 1996, an interim order was passed in the Writ Petition directing maintenance of the status quo and restraining the State Government and the authority from executing a sale deed in favour of the alleged lessee’s sons. It was the duty of the State Government and the authority who were parties to the appeal preferred by the alleged lessee to point out to the Court that a Writ Petition filed by the school arising out of the auction of the plot was pending. The said fact was suppressed from the High Court by all the parties to the appeal. When the Writ Petition was pending, the propriety demanded that before directing conversion in favour of the alleged lessee, the State Government should have applied to the High Court, to seek permission to do so, in the pending Writ Petition. That was not done. The alleged lessee cannot plead ignorance about the knowledge of the Writ Petition as the interim orders were passed in the Writ Petition after hearing his sons. The alleged lessee and his sons were together, and the same counsel represented them even before this Court. The order passed by the State Government of conversion is a covert method of defeating the High Court’s interim order of 18th July 1996.
15. Now, we come to the school’s argument to restore the earlier order of 1995 accepting the bid offered by it. We must note that more than 20 years have passed since the auction. During this period, the property prices in Lucknow must have been substantially increased. Even assuming that the learned senior counsel appearing for the school is right in contending that illegality has been committed by [2024] 8 S.C.R. City Montessori School v. State of U.P. & Ors. setting aside the highest bid of the school, now it will be unjust to restore the order of acceptance of the bid passed in favour of the school, about 20 years back. If, at this stage, the school is allowed to purchase the plot at the price offered by the school 20 years back, the sale will not be fair, as it is a property of the State.
16. Therefore, in our view, the impugned judgment of the High Court, by which the order of conversion and the deed of conversion in favour of the alleged lessee were set aside, calls for no interference.
17. We, therefore, dismiss both the appeals. Whether the lease claimed by the alleged lessee is valid and subsisting and whether the plot can be put to auction are the questions left open which can be agitated by the parties in appropriate proceedings. However, the alleged lessee shall not be dispossessed without due process of law. It is for the State Government to decide, whether it is permissible to put the plot to fresh auction in the light of the current policies/laws prevailing. It will be open to the school to apply for a refund of the money paid towards the bid amount. It will also be open to the alleged lessee to apply for a refund of the amount paid for converting the plot from leasehold to freehold. The State Government/authority will issue the necessary refund within six weeks of making such applications.
18. There will be no order as to costs. Result of the case: Appeals dismissed. †Headnotes prepared by: Prastut Mahesh Dalvi, Hony. Associate Editor (Verified by: Abhinav Mukerji, Sr. Adv.)