B. K. Ghosh S/o Tushar Kanti Ghosh v. Steel Authority of India through its Chairman, New Delhi
2025-10-31
Arvind Kumar Verma
body2025
DailyLaw.ai
ORDER : 1. The instant writ petitions, by the petitioners all of whom are lessees of plots situated in the Bhilai Steel Plant Township. The petitioners’ assail the demands made by the respondent, Steel Authority of India Limited (SAIL), comprising the so-called “applicable Land Premium” on the ground of unilateral demands as well as excessive ground rent and service charges purportedly applicable at the time of lease renewal. The petitioners seek a direction to the respondents to renew their leases strictly in accordance with the original lease deeds and to restrain the respondents from imposing arbitrary charges issued by the Steel Authority of India Limited (SAIL) for renewal of lease deeds executed in favor of the petitioners more than three decades ago. The controversy touching upon contractual sanctity, fairness in administrative action and the interplay between Central undertakings and State policies, warrants a composite adjudication. Thus, these writ petitions, heard analogously, raise common questions of law and fact concerning the legality of the offer/demand letters dated 01.04.2025. BRIEF FACTS OF THE CASE 2. The undisputed factual matrix is that under the Union of India’s Second five Year Plan (1955), the Bhilai Steel Plant was established in collaboration with the Russian Government. The then State of Madhya Pradesh agreed to provide facilities, including land acquisition for the project. 3. Pursuant to an agreement between the Union and the State (1958) lands were compulsorily acquired with a stipulation that any transfer of land to private persons would require the concurrence of the State Government. In furtherance therefore, residential-cum-commercial plots in Bhilai Township were allotted by SAIL to individuals, including the petitioners or their predecessors through registered lease deeds of 33 years duration (1989-1991). the lease deeds contained clear stipulations: A one time premium was paid at the inception of the lease; An annual ground rent and service charge were agreed; Upon renewal, the ground rent could be enhanced by not more than 50% of the prevailing rent. No other charges such as fresh premium or service levy were envisaged at the stage of renewal. 4. The petitioners, long standing occupants and lawful lessees applied for renewal of their leases upon expiry.
No other charges such as fresh premium or service levy were envisaged at the stage of renewal. 4. The petitioners, long standing occupants and lawful lessees applied for renewal of their leases upon expiry. Instead of a renewal on contractual terms, they were served with the impugned offer/demand letters dated 01/04/2025 demanding exorbitant sums under heads of “Applicable Land Premium”, “Service Charges” “Ground Rent” and “Security Deposit” calculated on land valuations without consultation with the petitioners by respondent No.1. As per the BSP for SAIL, it has issued offer letter dated 01.04.2025 and for renewal, following charges has been shown: The petitioners or their predecessors-in-title were allotted plots in the Bhilai Steel Plant Township under registered lease deeds executed in 1982 to 1995 for a period of 30/33 years. The relevant terms of the lease deed are: i. Enhancement of ground rent at the time of lease renewal shall not exceed 50% of the existing rent; ii) No other charges, including lease premium or “renewal charges’, are payable iii) the lease deeds bind the parties to the conditions and obligations stipulated therein. 5. The Union of India, in furtherance of the Second Five Year Plan conceptualized the establishment of the Bhilai Steel Plant, with land being transferred by the State Government of Madhya Pradesh under conditions requiring prior approval of the State for any lease or transfer to private parties. These historical conditions remain binding and relevant to the present disputes. In complete disregard of these conditions, respondent No.1 during its Board meetings held on 21.07.2008 and 25.07.2008, introduced a new term, the “ Applicable Land premium ”, to be levied on all plots for lease renewal including plots already allotted. 6. The District Collector, Durg vide letter dated 31.07.2019 unequivocally clarified that : i) Any premium or additional charge is payable only tat the time of initial lease grant. ii) No premium or extra charges may be imposed at the time of renewal, iii) The management of the plant was directed to act in accordance with State Government rules and policy. 7. In furtherance of the Collector’s directive, the Chief General Manager (TA) Bhilai Steel Plant, issued a letter dated 23.11.2019 to the Corporate Office of SAIL reiterated that charging premium at the time of lease renewal is prohibited under applicable policy. 8.
7. In furtherance of the Collector’s directive, the Chief General Manager (TA) Bhilai Steel Plant, issued a letter dated 23.11.2019 to the Corporate Office of SAIL reiterated that charging premium at the time of lease renewal is prohibited under applicable policy. 8. Despite these directives, the petitioners received offer/demand letters dated 01.04.2025 requiring payment of amounts computed under the 2008 Guidelines, which included “ Applicable Land Premium”, enhanced ground rent and service charges, all of which are under the original lease agreements. It is contended that such demands are exorbitant,unilateral and contrary to lease deeds and State policy, hence have approached this Court under Article 226. SUBMISSIONS OF THE COUNSEL FOR THE PETITIONERS 9. Shri Paranjape, learned Sr. Counsel for the petitioners in WPC Nos. 2337 of 2025, 2280 of 2025, 2330 of 2025, 2331 of 2025, 2335 of 2025, 2336 of 2025, 2338 of 2025, 2340 of 2025, 2345 of 2025, 2346 of 2025, 2379 of 2025, 2387 of 2025, 2393 of 2025, 2510 of 2025, 3709 of 2025 and 3728 of 2025, submits that the petitioners are lawful lessees of plots situated in the Bhilai Steel Plant Township, having acquired the said plots either directly or through their predecessors-in-title pursuant to registered lease deeds executed in the year 1982, 1987, 1988, 1989, 1990, 1991, 1993, 1995 to different petitioners, each for a term of 30 & 33 years. These lease deeds are unambiguous and binding contracts, stipulating the terms of allotment and renewal, including the express limitation that ground rent at the time of renewal shall not exceed 50% of the existing rent, and explicitly excluding any other charges, including lease premium or service charges art the time of renewal. It is submitted that in the identical matter concerned lease renewal in the Bokaro Steel Plant Township, the Jharkhand High Court in Shobhna Ojah and Others Vs. Steel Authority of India Ltd. and Others , WP (C) No. 1155 of 2004 vide its order dated 12.09.2018 has held that the SAIL guidelines for commercial plots do not apply to residential-cum-commercial plots. Here too, the land allotted is for residential-cum-commercial use and hence the terms and conditions approved by SAIL’s Board on 21.07.2008 and 25.07.2008 cannot apply; accordingly, the impugned offer/demand letter is illegal and unsustainable. It has been further contended that the Apex Court in Mahabir Auto Stores and Others Vs.
Here too, the land allotted is for residential-cum-commercial use and hence the terms and conditions approved by SAIL’s Board on 21.07.2008 and 25.07.2008 cannot apply; accordingly, the impugned offer/demand letter is illegal and unsustainable. It has been further contended that the Apex Court in Mahabir Auto Stores and Others Vs. Indian Oil Corporation and Others , (1990) 3 SCC 752 , has emphatically held that in case of alteration of a long standing contractual relationship between a public sector undertaking and a private party, the affected party must be taken into confidence and the process must be fair and transparent. The unilateral modification of lease renewal terms by SAIL without informing the petitioners until expiry of the lease violates this principle and is liable to be set aside. 10. It is submitted by the counsels for the petitioners that the respondent/Steel Authority of India Limited (“SAIL”) in complete disregard of the contractual terms and without consultation with the affected lessees, unilaterally issued impugned letters dated 01.04.2025 demanding: a. payment of a newly introduced “Applicable Land Premium” b. Enhanced ground rent exceeding the ceiling of 50% c. Service charges not contemplated in the original lease deeds. These demands are wholly arbitrary, illegal and manifestly contrary to the express contractual rights of the petitioners 11. Next contention of the counsels for the petitioners is that there is violation of State Policy and Legal Framework. a. The District Collector, Durg vide letter dated 31.07.2019 clarified in unequivocal terms that : i) premium or additional charges are payable only at the time of initial lease grant; ii) the management of the Plant was directed to act in strict compliance with the rules and policy of the State government. b. The respondent No.1 has flouted these directives , thereby acting in violation of statutory rules and State policy, which are binding on the management of the Bhilai Steel Plant. 12. It is next submitted by the counsels for the petitioners that t here is Breach of Contractual and Constitutional Rights. a. it is submitted that the actions of the respondent No.1 constitute a unilateral alteration of the lease contracts , which is impermissible in law. b. the imposition of charges beyond what is provided under the lease deeds amounts to arbitrariness and oppression, violating Article 14 of the Constitution, as the petitioners are being singled out to pay sums not agreed upon in the contract.
b. the imposition of charges beyond what is provided under the lease deeds amounts to arbitrariness and oppression, violating Article 14 of the Constitution, as the petitioners are being singled out to pay sums not agreed upon in the contract. c. By imposing unauthorized financial demands, respondent NO.1 has interfered with the vested rights of the petitioners., causing undue hardship and financial prejudice. 13. It is submitted that there is lack of State concurrence/historical conditions. The lease deeds and allotments of the plots were made pursuant to a historical framework in which the State Government’s concurrence was required for any transfer of rights to private parties , as evidenced by the letter dated 25.09.1958. the respondent No.1 has neither sought nor obtained such concurrence from the State Government while imposing new terms and charges, rendering such imposition ultra vires and legally unsustainable. 14. There is failure of respondent No.1 to act in good faith. It is submitted that the 2008 guidelines , which purport to introduce new charges, were framed without transparency, without consultation with existing lessees and without public notice . This conduct is contrary to the principles enunciated by the Apex Court in Mahabir Auto Stores and Others Vs. Indian Oil Corporation and Others , (1990) 3 SCC 752 , which mandates that any alteration of long standing contractual relations by a public sector undertaking must be fair, transparent and made with the knowledge of affected parties. In the instant cases, respondent No.1 failed entirely to communicate the altered terms prior to the renewal thereby acting in flagrant violation of fairness and natural justice 15. There is distinction between Commercial and Residential-cum- commercial plots. It is settled law as per the decision of this Court in Shobhna Ojha and Others Vs. Steel Authority of India Limited and Others in WPC No. 1155 of 2004 that guidelines applicable to commercial plots do not apply to residential-cum-commercial plots. The petitioners’ plots are residential-cum-commercial and therefore, the 2008 Guidelines cannot be invoked against them. Any attempt to enforce the same is therefore contrary to law and precedent. 16.
Steel Authority of India Limited and Others in WPC No. 1155 of 2004 that guidelines applicable to commercial plots do not apply to residential-cum-commercial plots. The petitioners’ plots are residential-cum-commercial and therefore, the 2008 Guidelines cannot be invoked against them. Any attempt to enforce the same is therefore contrary to law and precedent. 16. Contention of the counsels for the petitioners is that there would be financial impact on them as the impugned letters demand exorbitant amounts, calculated on the basis of the 2008 Guidelines including: a. “Applicable Land Premium”’, b. Ground rend far exceeding the 50% ceiling and c. Service charges not stipulated in the lease deeds. The financial demands are detailed in Annexure “A” which clearly established that the demands are arbitrary, excessive and wholly unsustainable in law. Enforcement of these charges will cause irreparable financial hardship to the petitioners and would constitute enforcement of illegal demands, which has to be prevented. The petitioners therefore have sought for the following reliefs: 10.1. To declare the resolution passed in the 340th Meeting of the Board of Directors held on 21 st and 25 th July 2008 along with approved terms and conditions of the allotment (leasing/sub-l;easing) as unconstitutional, bad in law and void-ab initio and as a consequence quash/set aside Annexure –P/1A. 10.2. To set aside the offer letter/demand letter dated 01.04.2025 (Annexure P-1B) issued to the petitioners pursuant to the aforesaid resolutions. 10.3. to direct the concerned respondent(s) to re- consider the case of the petitioner for renewal of lease dated 12.04.1991 as per Clause-5 sub clause (1) of the aforesaid deed and as sequitur re-calculate the amount to be paid by the petitioner for renewal of lease dated 12.04.1991 as per Clause-5 sub clause (1) of the aforesaid deed. 10.4 As sequitur to preceding clauses 10-1-10.3 issue a writ of mandamus directing the concerned respondent(s) to issue a fresh offer letter/demand letter to the petitioners. 10.5. To direct the concerned answering respondent(s) not to dispossess and/or evict the petitioners from their lands/subject leased property. 10.6. To pass an appropriate writ, order or direction as this Hon’ble Court may deem fit in the facts and circumstances of the case”. 17. Therefore, it is submitted on behalf of the petitioners that the impugned action of the respondent No.1 are arbitrary, oppressive, ultra vires and in violation of settled principles of law, fairness and equity.
10.6. To pass an appropriate writ, order or direction as this Hon’ble Court may deem fit in the facts and circumstances of the case”. 17. Therefore, it is submitted on behalf of the petitioners that the impugned action of the respondent No.1 are arbitrary, oppressive, ultra vires and in violation of settled principles of law, fairness and equity. The petitioners’ rights under the lease deeds, State Government policy and constitutional law are being violated. It is therefore imperative that this Hon’ble Court intervenes and grants the reliefs sought, to uphold the rule of law. Therefore the impugned demand and renewal terms issued by the respondents lack legality and equity, necessitating their reconsideration and a fresh opportunity to the petitioners for renewal on reasonable and fair terms consistent with applicable State policies and judicial pronouncements. 18. In these circumstances, the impugned demand letter dated 01.04.2025 is manifestly arbitrary and suffers from non-application of mind and is contrary to the lease terms, policy directions of the State Government and judicial precedents. The same deserves to be quashed and the respondent-authorities be directed to renew the lease of the petitioners strictly in accordance with the original terms of the registered lease deed and the applicable government policy. 19. Shri T.K.Jha, learned counsel for the petitioners in WPC Nos. 2984 of 2025, 2997 of 2025, 2999 of 2025, 2606 of 2025, & 2610 of 2025 submit that the petitioners are long standing lessees of plots situated in Bhilai Steel Plant Township having acquired the plots either directly or through their predecessors-in-title pursuant to registered sale lease deeds executed in 1989-1991, each for a term of 33 years. The lease deeds expressly provide for renewal with the only permissible increase in ground rent being 50% of the existing rent and expressly exclude any payment of premium, service charges, or other levies at the time of renewal. 20. He submits that the respondents have willfully ignored the instructions of the State policy and have acted in contravention of statutory rules and principles of good governance. He submits that the impugned demands constitute a unilateral alteration of the lease deed, which is prohibited under settled law. Such action violates Article 14 of the Constitution as it is arbitrary and discriminatory, singling out the petitioners to pay sums not agreed under the lease deeds.
He submits that the impugned demands constitute a unilateral alteration of the lease deed, which is prohibited under settled law. Such action violates Article 14 of the Constitution as it is arbitrary and discriminatory, singling out the petitioners to pay sums not agreed under the lease deeds. He submits that by imposed these charges without consent, respondent No.1 has interference with the vested rights of the petitioners, causing undue financial hardship and uncertainty. 21. He submits that the valuation report relied upon by the respondents was prepared without providing the petitioners any opportunity of hearing and without taking into account the lease deed terms, historical ground rent or longstanding occupancy. Reliance on such valuation, in disregard of the express terms of the lease deeds and directives of the District Collector, is legally impermissible and arbitrary. It is further submitted that the impugned charges are exorbitant, unfair and calculated without any lawful basis as demonstrated in the detail schedule annexed to the petition. 22. Enforcement of these charges would result in irreparable financial hardship to the petitioners and would amount to implementation of illegal demands. He has placed his reliance in the judgment of the Jharkhand High Court in Hanuman Malla Surana Vs. SAIL in WPC No. 2440 of 2015 order dated 08/18.07.2022, where similar demands were quashed and reassessment directed on rational principles. He therefore has sought the following reliefs: 10.1. The Hon’ble Court may kindly be pleased to call for the record of the SAIL/BSP relating to renewal of lease of the petitioners. 10.2. The Hon’ble Court may kindly be pleased to allow these petitions and set aside the offer letter/notice dated 01.04.2025 (Annexure P/3) issued to the petitioners in the interest of justice. 10.3 The Hon’ble Court may kindly be pleased to allow these petitions and direct the concerned respondents to reconsider the case of the petitioners for renewal of lease dated 12.03.1991 as per clause 5 sub clause (1)/aforesaid lease deed. 10.4. The Hon’ble Court may kindly be pleased to allow these petitions and direct the concerned respondent to issue fresh offer letters/demand letters to the petitioners. 10.5. The Hon’ble Court may kindly be pleased to allow this petition and direct the concerned respondent not to dispossess/evict the petitioners from their shops in the interest of justice.” 23. Shri Himanshu Choubey, learned counsel for the petitioners in WPC Nos.
10.5. The Hon’ble Court may kindly be pleased to allow this petition and direct the concerned respondent not to dispossess/evict the petitioners from their shops in the interest of justice.” 23. Shri Himanshu Choubey, learned counsel for the petitioners in WPC Nos. 4124 of 2025, 4131 of 2025, 4142 of 2025, 4143 of 2025, 4144 of 2025, 4145 of 2025, 4146 of 2025, 4150 of 2025, 4153 of 2025, 4156 of 2025, 4167 of 2025 and 4168 of 2025 placed the case on the following broad propositions: 1. Genesis of the Land Transfer : It has been submitted that the land in question, measuring about 32,000 acres, was originally acquired and transferred by the State of Madhya Pradesh to the Central Government in furtherance of the Second Five Year Plan for establishment of the Bhilai Steel Plant and the same was subsequently assigned to Hindustan Steel Ltd., predecessor-in-interest of the present respondent No.1 viz. Steel Authority of India Limited. By reason of such assignment, all rights and obligations which were otherwise vested in the Central Government stood transferred to respondent No.1. Creation of Leasehold Rights : Learned counsel contended that the predecessor-in-interest of the petitioner was allotted the suit plot to establish his commercial-cum-residential unit at New Civil Centre, Bhilai and t5hat such allotment was governed by a registered lease deed executed for a fixed term of 33 years. The covenants of the said lease unambiguously provided that , upon expiration of the lease period,t he rent may be enhanced by respondent No.1 but in no event beyond 50% of the rent prevailing during the preceding period. Crucially the document did not contemplate, either expressly or by necessary limitation, the imposition of any additional premium, levy or charges at the time of renewal. I llegality of Exorbitant Charges under the 2008 Resolutions : Learned counsel for the petitioners vehemently assailed the resolutions adopted by the Board of Directors of Respondent No.1 in its 340 th meeting held on 21 st and 25 th of July 2008, whereby, a wholly new concept terms as “Applicable Land Premium” was devised being linked to the market valuation of the land as assessed by valuers engaged by respondent. It was urged that such stipulation stands dehors the original contractual arrangement and its retrospective application upon per-existing leases strikes at the very root of fairness, reasonableness and legality.
It was urged that such stipulation stands dehors the original contractual arrangement and its retrospective application upon per-existing leases strikes at the very root of fairness, reasonableness and legality. The petitioners, whose lease was executed several decades earlier, could not be subjected to fresh onerous conditions which alter the fundamental terms of the agreement to his detriment. Reliance has been placed on the judgment of the Jharkhand High Court Shobhna Ojha and Others Vs. Steel Authority of India Ltd. & Others, wherein it has been held that the 2008 guidelines of SAIL are applicable only to purely commercial plots and not to residential-cum-commercial plots such as those in Bhilai Township. The ration of the said decision is squarely applicable to the present case and binds the respondents on the principle of parity. 24. The unilateral imposition of fresh financial liabilities by the respondents is not only beyond their contractual competence but also offends the principles of reasonableness and fair play implicit in Article 14 of the Constitution of India. The Apex Court i n Mahabir Auto Stores and Others Vs. Indian Oil Corporation and Others , has laid down that any alteration in a long standing contractual relationship involving a state or a public sector undertaking must be preceded by fair consultation and objective reasoning. The impugned action being opaque and unilateral, stands vitiated on this court as well. 25. It is therefore submitted that the respondents have acted contrary to the terms of the lease, the policy of the State Government and judicial precedent and have sought to impose arbitrary, monetary obligations upon the petitioners without lawful authority. The impugned offer/demand letter dated 01.04.2025 deserves to be quashed and the respondents be directed to renew the lease strictly in accordance with the original lease deed and the prevailing guidelines of the State Government. He therefore, has sought for the following reliefs: 10.1. To declare the resolution passed in the 340 th meeting of the Board of Directors held on 21 st and 25 th July, 2008 along with approved terms and conditions of the allotment (leasing/sub-leasing) as unconstitutional, bad in law and void ab initio and as a consequence quash/set aside Annexure P-1A. 10.2 To set aside the offer letter/demand letter dated 01.04.2025 (Annexure P/1B) issued to the petitioners pursuant to the resolution. 10.3.
10.2 To set aside the offer letter/demand letter dated 01.04.2025 (Annexure P/1B) issued to the petitioners pursuant to the resolution. 10.3. To direct the concerned respondents to reconsider the case of the petitioners for renewal of lease deeds dated 23.10.1989 as per clause-5 sub clause (1) of the aforesaid deeds and a sequitur re-calculate the amount to be paid by the petitioner for renewal of lease deeds dated 23.10.1989 as per clause-5 sub clause (1) of the aforesaid deeds. 10.4. As sequitur to preceding clauses 10.1- 10.3 issue a writ of mandamus directing the concerned respondent(s) to issue fresh offer letters/demand letters to the petitioners. 10.5. To direct the concerned answering respondents not to dispossess and /or evict the petitioners from their land/subject lease property. 10.6. To pass an appropriate writ, order or direction as this Hon;ble Court may deem fit in the facts and circumstances of the case.” 26. Opposing the submissions of the learned counsels for the petitioners, Dr. Saurabh Pandey, learned counsel for the respondents submits that the claims of the petitioners for renewal of lease without payment of the prescribed premium and renewal charges is misconceived and devoid of merits. The original lease granted for the petitioners has expired on 11.04.2024 and several other dates and in the absence of a timely and valid renewal, his continued occupation constitutes that of an unauthorized occupant under Section 2(e) of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971. There is no statutory or contractual provision for automatic renewal; fresh lease requires mutual consent and execution of a new agreement, as settled by the Apex Court precedents. As settled by the Apex Court upon expiry of the lease, there exists no automatic right of renewal, nor any subsisting tenancy, and the petitioner has no enforceable legal right to retain possession without compliance with fresh terms laid down by the lessor. It is pertinent to mention that as per the erstwhile lease deed, the lease was valid till 11.04.2024 and in terms of sub-clause 6 of clause 5 of the lease deed, the petitioners were under a specific obligation to serve a written notice of their intention to retain the demised plot for a further period of 33 years.
It is pertinent to mention that as per the erstwhile lease deed, the lease was valid till 11.04.2024 and in terms of sub-clause 6 of clause 5 of the lease deed, the petitioners were under a specific obligation to serve a written notice of their intention to retain the demised plot for a further period of 33 years. Therefore the expiry of the original lease term on 11.04.2024 and in the absence of the mandatory notice as stipulated, the contractual relationship of the lessor and lessee stood terminated by efflux of time and no right to further retain the subject plot accrues in favour of the petitioner. 27. It is submitted that the renewal clause in the lease deed specifically provides that renewal may be granted for a further period of 33 years “on the terms and conditions as may be decided either by the Lessor”. The respondent company as successor-in-interest and vested with absolute powers of management over the land, is entitled to revise and lay down fresh terms, including the levy of premium and renewal charges, in accordance with the prevailing policy decisions approved by this Board. The 340 th and extended Board meeting of SAIL held on 21 st and 25 th July 2008 validly prescribed a market based valuation and mandates payment of a renewal premium equivalent to 25% of the applicable land value for continuing leases which is uniformly applicable to all lessees in the township. 28. It is further contended that upon expiry of lease, continuing occupation without execution of a new lease or payment of applicable premium renders the petitioner an unauthorized occupant under Section 2(e) of the Public Premises (Eviction of Unauthorized occupants) Act, 1971, with no right to renewal or occupation. It is contended that the petitioners, by failing to pay the required renewal premium and charges have forfeited any right of renewal. Mere exercise or demand for renewal by a lessee does not grant an automatic extension or a vested right; a fresh lease must be executed and appropriate consideration paid, as acknowledged by settled law and recent judicial precedents. Case law interpreting similar lease and renewal disputes, including BDA Limited Vs. State of U.P. and Hardesh Ores Pvt. Ltd. Vs. Hede and Co. affirms that renewal is by mutual consent, subject to fresh terms and only upon execution of a new lease agreement. 29.
Case law interpreting similar lease and renewal disputes, including BDA Limited Vs. State of U.P. and Hardesh Ores Pvt. Ltd. Vs. Hede and Co. affirms that renewal is by mutual consent, subject to fresh terms and only upon execution of a new lease agreement. 29. The jurisdiction lies with the Estate officer under 1971 Act and the disputes concerning eviction and unauthorized occupation of public premises (such as SAIL land) fall exclusively under the jurisdiction of the designated Estate Officer as per the Act; civil court jurisdiction is expressly barred and writ remedy is generally not maintainable until the Act’s process is exhausted. It is submitted that SAIL’s property and Bhilai Township is “public premises” as notified and covered under the Act of 1971. Any further occupation post expiry of lease, absent execution of a fresh lease or payment of premium as demanded, renders the petitioner liable for eviction as an unauthorized occupant. The jurisdiction for disputes relating to eviction or unauthorized occupation squarely lies with the Estate Officer under the Act as settled by the Constitution Bench in Ashoka Marketing Ltd. Vs. Punjab National Bank , (1990) 4 SCC 406 , wherein it has been held as under: “33. Another submission that has been urged by Shri Ganguli is that the question whether a lease has been determined or not involves complication questions of law and the estate officer, who is not required to be an officer well versed in law, cannot be expected to decide such questions and, therefore, it must be held that the provisions of the Public Premises Act have no application to a case when the person sought to be evicted had obtained possession of the premises as a lessee. It is true that there is no requirement in the Public Premises Act that the estate officer must be a person well versed in law. But that, by itself, cannot be a ground for excluding from the ambit of the said Act premises in unauthorized occupation of persons who obtained possession of the said premises under a lease. Section 4 of the Public premises Act requires issuing of a notice to the person in unauthorized occupation of any public premises requiring him to show cause why an order of eviction should not be made.
Section 4 of the Public premises Act requires issuing of a notice to the person in unauthorized occupation of any public premises requiring him to show cause why an order of eviction should not be made. Section 5 makes provisions for production of evidence in support of the cause shown by the person who has been served with a notice under Section 4 and giving of a personal hearing by the estate officer. Section 8 provides that an estate officer, shall for the purpose of holding any enquiry under the said Act have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, when trying a suit in respect of the matters specified therein namely: (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring discovery and production of documents; (c) any other matters which may be prescribed. 34. Rule 5(2) of the Public Premises (Eviction of Unautho- rised Occupants) Rules, 1971, requires the estate officer to record the summary of evidence tendered before him. Moreover Section 9 confers a right of appeal against an order of the estate officer and the said appeal has to be heard either by the district judge of the district in which the public premises are situate or such other judicial officer in that district of not less than ten years' standing as the district judge may designate in that behalf. In shows that the final order that is passed is by a judicial officer in the rank of a district judge.” 30. It is contended that the petitioners’ continued occupation of the leased premises post expiry of the lease does not confer any right of tenancy, as there has been no consent either express or implied-by the respondent for such consent. The petitioners are therefore a tenant at sufferance, a status well settled in Indian Jurisprudence. As per R.V. Bhupal Prasad Vs. State of Andhra Pradesh , (1995) 5 SCC 698 , a tenant at sufferance is one who originally possessed lawfully under a lease but wrongfully continues possession after expiry without landlord’s consent, akin to a trespasser and is liable to be evidence by due process of law. 31.
As per R.V. Bhupal Prasad Vs. State of Andhra Pradesh , (1995) 5 SCC 698 , a tenant at sufferance is one who originally possessed lawfully under a lease but wrongfully continues possession after expiry without landlord’s consent, akin to a trespasser and is liable to be evidence by due process of law. 31. Any advisory or communication from the District Collector or State authorities regarding remission of premium cannot bind the respondent company or override express policy decisions of the SAIL Board, particularly where the company has absolute title and autonomy over its land as per the Apex Court’s pronouncements in Steel Authority of India Ltd. Vs. State of Madhya Pradesh and related precedents. The learned Counsels for the petitioner’s reference to prior government policy is thus irrelevant and not legally enforceable against SAIL in the present circumstances. 32. Therefore, it is submitted that the Bhilai Steel Plant Properties have been duly notified as public premises in accordance with statutory requirements and Board-approved policies. The renewal terms and conditions, including rent and premium have been strictly applied in accordance with the 340 th Board resolution effective from April 1, 2008. This resolution prescribed uniform rates-Rs. 2,000/- per month for 33 years (as per the land acquired by the petitioners in the residential-cum-commercial plots in Bhilai Township) based on market assessment and policy review, which is both nominal and reasonable considering the commercial growth and maintenance costs to the township. 33. The lease renewal premium is calculated by a certified valuer according to established procedures and forms the valid consideration for execution of a fresh lease as mandated by law. The collection of statutory and maintenance charges is essential for sustainable management and does not constitute any illegality or arbitrariness. The petitioners failed to comply with Clause 5(6) of their respective lease deeds by not applying for the renewal within prescribed six months; thus, they became unauthorized occupants upon expiry of the lease. Mere payment or acceptance of rent thereafter does not create any tenancy or automatic right for renewal unless communicated and executed by the respondent company. The offer letters for renewal issued by the BSP are therefore valid and enforceable and the claims of the petitioners for re-assessment or lower rates are not tenable. 34.
Mere payment or acceptance of rent thereafter does not create any tenancy or automatic right for renewal unless communicated and executed by the respondent company. The offer letters for renewal issued by the BSP are therefore valid and enforceable and the claims of the petitioners for re-assessment or lower rates are not tenable. 34. Lastly, the principle of judicial restrain in administrative matters especially relating to leases of public premises, bars interference unless there is proof of malafide or arbitrariness, ash eld in Tata Cellular Vs. Union of India , (1994) 6 SCC 651 . The respondent has acted strictly within the empowerment of its Board-approved policies. 35. Heard learned counsel for the parties and the submissions as well as the material available on record with utmost circumspection. 36. The petitioners/former lessees of market/shop premises in Bhilai Steel Plant Township, seek various reliefs including renewal of lease on original or prior terms, quashing of impugned demands for renewal premium, service charges, service charges and allied sums, or direction for reassessment and hearing prior to finalization of renewal terms. After considering the counter affidavit, documents, elaborate written and oral submissions and relevant legal authorities, the present petitions seeking directions for renewal of lease on earlier terms and challenging the enhanced charges and premium demanded by the respondent-Steel Authority of India Limited (SAIL) Bhilai Steel Plant-stand dismissed for the following reasons: Factual and legal matrix: 1. The petitioners/precursors were lessees of shop premises in Bhilai Township under the registered lease deeds executed by SAIL for fixed periods of 30-33 years with agreed initial premium service charge and annual ground rent. Upon expiry of said tenures, the petitioners have been filed aggrieved by the demand raised vide offer letters dated 01.04.2025 , whereby SAlL set out revised premium, renewal charges (25% of current land value), service charges, ground rent, and security deposit as per extent Board-approved policy. Petitioners objected that the new charges were exorbitant, based on one-sided valuation and imposed without adequate hearing, despite their status as long standing or old lessees rendering service to SAIL staff for decades. The lease period having come to an end and in the absence of any notice or representation from the petitioners for grant of a fresh lease as contemplated under Clause 5(6) of the erstwhile lease deed, no subsisting right can be claimed by the petitioners over the said property. 2.
The lease period having come to an end and in the absence of any notice or representation from the petitioners for grant of a fresh lease as contemplated under Clause 5(6) of the erstwhile lease deed, no subsisting right can be claimed by the petitioners over the said property. 2. The lease deeds executed in favor of the petitioners provided for possible renewal “on such terms and conditions as may be decided by the lessor” unequivocally vesting the discretion to prescribed financial and other stipulations with SAIL at the relevant time. 3. It is now settled by the Apex Court and reiterated in State of West Bengal Vs. Calcutta Mineral Supply Co. Pvt. Ltd. (2015) 8 SCC 655, that renewal of a lease amounts to a fresh grant wherein any right to continue beyond expiry is contingent upon mutual agreement and execution of new terms, not upon unilateral demand by the lessee. No automatic vesting of rights occurs unless new lease is formally created and prior premium or ground rent provisions cannot be read as a binding for the fresh term. 4. The SAIL Board, as successor in interest with absolute title over the property is competent to lay down uniform policies for valuation, premium and charges towards renewal of lease in township areas. The guidelines framed in the 340 th and extended meeting (July 2008) prescribed payment of 25% market value as premium, commensurate service charge and ground rent and security deposit by all lessees whose leases are due for renewal. This has been acknowledged as reasonable in analogous judicial precedents. 5. The contention by the petitioners regarding arbitrary enhancement, non-consultation or lack of opportunity by the valuation agency is not supported either by the lease documents or relevant law. It is now trite that a public sector body is not bound to perpetuate historically lower charges or premiums irrespective of economic realities. The principle of fairness under Article 14 or contract is satisfied so long as the renewal offers apply uniformly and are rationally derived through Board approved process not individual negotiation or precedent alone. 6. The plea that recommendations or communications from State or District Authorities override the Board policy is misconceived. The absolute rights over Bhilai Township land are vested with SAIL, as pronounced in the relevant judgments and Board meetings, and prior government rate advisories do not bind the present lease agreements. 7.
6. The plea that recommendations or communications from State or District Authorities override the Board policy is misconceived. The absolute rights over Bhilai Township land are vested with SAIL, as pronounced in the relevant judgments and Board meetings, and prior government rate advisories do not bind the present lease agreements. 7. The jurisdiction to adjudicate disputes relating to eviction unauthorized occupation or lease renewal of public premises as covered by Section 2(e) of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 vests exclusively with the Estate Officer under the Act. The present proceedings, in substance, attempt to bypass the statutory remedial mechanism and are therefore not maintainable before this Court in writ jurisdiction, as held by the Constitution Bench in Ashoka Marketing Ltd. Vs. Punjab National Bank . 8. The reliance made by the petitioners on isolated orders of other Courts such as the Jharkhand High Court in Hanuman Malla Surana Vs. SAIL , is factually distinguishable and does not affect the general statutory and contractual position at Bhilai, as it is bound by the local policy, SAIL’s guidelines and relevant lease deeds. They have further objected that the new charges were exorbitant, based on one sided valuation and imposed without adequate hearing, despite their status as long standing or old lessees rendering service to SAIL staff for decades. 37. ANALYSIS AND FINDINGS : (a) Nature of Right after Lease Expiry: Upon lease expiry, no tenant including the present petitioners, has any automatic or vested right to renewal or continued possession. Renewal clauses where present in the original lease, vest the discretion with lessor (SAIL) “on such terms and conditions as may be decided by the lessor.”. Both statutory law (Section 107, Transfer of Property Act) and binding precedents (Hardesh Ores Pvt. Ltd. Vs. Hede & Co. (2007) 5 SCC 614 ) confirm that renewal is fresh grant, not a matter of right. As per Sub-clause 6 of Clause 5 reads as under: “if the lessee wants to reatin the demised land for a further term \\of 33 years, the lessee shall given notice of his intention to do so to the Lessor six months prior tot he date of expiry of such period and the Lessor may grant a fresh lease in respect of the land herein demised for a further period of 33 years on the terms and conditions as may be decided by the Lessor.
In case, the lessee wants to retain the demised land for a further term of 33 years, subsequent to the expiry of the term of the first renewal as above, the lessee shall give notice of his intention to do so six months prior to the date of expiry of the period of such renewal and the lessor may grant a further lease in respect of the land herein demised for a further period of 33 years on the terms and conditions as may be decided by the Lessor.” (b) SAIL’s Power to Revise Terms/Charges: The respondents, as absolute owners and managers of the public premises by virtue of assignment from the Central Government, are lawfully empowered to fix rates and frame policies for renewal after expiry. As held in Steel Authority of India Ltd. Vs. State of M.P. (1999) 4 SCC 76 , and reaffirmed in the High Court precedents, Board- approved policies apply uniformly to all similar cases. The impugned conditions, including payment of premium at 25% of land value, service charges and security deposit, have statutory and contractual legitimacy and are not per se arbitrary. (c) Public Premises and Jurisdiction: The properties in question constitute “public premises” within Section 2(e) of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971. The procedure for eviction, renewal and adjudication of disputes lies with the designated Estate Officer;civil jurisdiction (including writ petitions of this nature) is expressly barred. The Apex Court’s Constitution Bench in Ashoka Marketing Ltd. Vs. Punjab National Bank , (1990) 4 SCC 406 reiterated this principle. These petitions, essentially seeking to block or modify terms of renewal is thus not maintainable in this Court (d) Fairness, Reasonableness and Opportunity The petitioners’ contention that SAIL did not give opportunity of hearing or that premium/charges are arbitrary, is unpersuasive. All lessees were issued a uniform offer letter with break-up of charges. Board-approved policies are the benchmark for reasonableness; individualized notice or negotiation on every old allotment is administratively impractical and not mandated by law or equity unless there is manifest discrimination, which is not shown. The cited rulings ( Hanuman Malla Surana Vs. SAIL ) pertain to fact-specific assessments in other jurisdictions and do not unsettle the prevailing law governing SAIL-Bhilai. State or District Collector advisories or communications on premium are not binding on SAIL, which has absolute title and Board-approved powers, post-transfer and assignment.
The cited rulings ( Hanuman Malla Surana Vs. SAIL ) pertain to fact-specific assessments in other jurisdictions and do not unsettle the prevailing law governing SAIL-Bhilai. State or District Collector advisories or communications on premium are not binding on SAIL, which has absolute title and Board-approved powers, post-transfer and assignment. Historic low rates cannot estop a public entity from updating policies in light of market realities and financial prudence as held in Aggarwal and Modi Enterprises Vs. New Delhi Municipal, (2007) 8 SCC 75 . 38. Having analyzed the submissions and the applicable legal framework, it is apparent that the petitioners have no enforceable right to renewal of lease on original terms, nor any entitled to disregard the charges prescribed in the current SAIL policy. Their continuing occupation post expiry is unauthorized unless fresh lease agreement is duly executed upon compliance with demand. The impugned notices and renewal conditions issued by SAIL are not arbitrary or illegal in the circumstances. 39. It is further observed that as per the offer letter dated 01.04.2025 issued by the respondent Steel Authority of India Limited, it can be seen simply in the manner for assuming that in WPC No. 2337 of 2025, the shop of the petitioner which is a public premise measuring 600 sq. ft. was originally allotted on a 33 years long term lease basis w.e.f. 12.04.1991 and valid till 11.04.2024 on the specific terms and conditions mentioned therein. If the petitioner is interest for renewal of lease for the said shop for a further term of 33 years, he was advised to make payment towards lease renewal charges as under: Total Lease Renewal Charges: 40. It has been further informed that the petitioner shall carry out necessary legal formalities to execute Lease Deed/Agreement in the prescribed format at his own cost and thereafter to deposit the abovementioned amount. It has to be ensured within one month from the date of issue of this offer letter, failing which this opportunity will automatically stand cancelled. The delay in payment of renewal charges will attract penal interest as per Company Rule. Likewise, other petitioners in the connected petitions have been issued the offer letter with the details of the charges levied on them. 41. From the aforesaid offer letter, it is clear that the respondent company has computed the annual rent for the renewal lease period at Rs.
Likewise, other petitioners in the connected petitions have been issued the offer letter with the details of the charges levied on them. 41. From the aforesaid offer letter, it is clear that the respondent company has computed the annual rent for the renewal lease period at Rs. 8,25,000/- which amounts to a nominal monthly rent of approximately Rs. 2100/- per month considering the commercial nature of the premise and the passage of time. In addition to this, the service charge, ground rent and security deposit represent statutory and maintenance related charges, essential and justified for upkeep and management of the township premises. These charges are in line with the Board-approved policy effective from 1 st April 2008 and subsequent resolutions and have been fixed after due valuation by certified professionals. The payment of such charges by lessees seeking renewal is standard, reasonable and legally sustainable, entitling the respondent to demand compliance as a prerequisite for execution of fresh leases. The respondent SAIL as of today, is recognized as one of the India’s fast growing industrial sector with significant recent expansion in production, sales and infrastructure investment. This growth has driven continuous modernization and capacity upgrades, reflected by its robust financial and operational benchmarks. 42. Consistent with this upward trajectory, SAIL has fixed the lease renewal premium and related charges for the Bhilai properties by valuation conducted through certified professionals, ensuring parity with market standards and company requirements for sustained asset and township management. This process is in line with policy and statutory mandates, supporting both transparency and future readiness in one of the country’s key steel and industrial hubs. 43. The petitioners’ failure to apply within the stipulated period for lease renewal as prescribed in the original lease agreements and subsequent policies, results in the forfeiture of any entitlement to renewal or extension bases on the prior lease terms. The respondent (SAIL/Bhilai Steel Plant), acting within its statutory and contractual rights has validly fixed the renewal charges including premium, rent and statutory obligations in accordance with the Board-approved policy effective from 1 st April 2008 and subsequent resolutions. The fixation of nominal rent of about Rs. 2000/- per month for 33 years, based on valuation by certified professionals, and the statutory charges are found to be reasonable, non-arbitrary and within the bounds of law and policy 44.
The fixation of nominal rent of about Rs. 2000/- per month for 33 years, based on valuation by certified professionals, and the statutory charges are found to be reasonable, non-arbitrary and within the bounds of law and policy 44. For all the above reasons, the petitions are devoid of merits, both in law and on facts. SAIL’s demand for payment of renewal charges, premium, service charge and ground rent is not arbitrary, violative of petitioners’ rights or contrary to applicable legal principles. The Court cannot substitute its wisdom for administrative or commercial decisions of the respondent in exercise of power of judicial review unless gross illegality, malafides or clear discrimination is shown, none of which are present in the facts at hand. 45. It is therefore submitted that the petitioners have no vested right to renewal without payment of fresh premium and charges under SAIL’s current lease renewal policy. The present petitions raises disputed facts, is premature with respect of proceedings under the Public Premises Act and deserves to be dismissed. No order as to costs.