M/S. HAJEE S.V.M. MOHAMED JAMALUDEEN BROS. AND CO. versus THE GOVERNMENT OF TAMIL NADU

Citation: [1997] 2 S.C.R. 413 · Decided: 24-02-1997 · Supreme Court of India · Bench: M.M. PUNCHHI, K.T. THOMAS · Disposal: Dismissed
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Judgment (excerpt)

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M/S. HAJEE S.V.M. MOHAMED JAMALUDEEN BROS. AND CO. 
A 
v. 
THE GOVERNMENT OF TAMIL NADU 
FEBRUARY 24, 1997 
[MADAN MOHAN PUNCHHl AND K.T. THOMAS, JJ.] 
Govemmcnt Grants Act, 1895-Sections 2 and 3-Grant-Inch1des 
licence granted by Govemment-Clause in the licence agreement empowering 
B 
the Govemment to unilateral(y rescined the licence-Held: Valid-Even if the 
grant is treated to be a lease, the said clause is protected under the Act-Hence C 
Govemment entitled to unilaterally tenninate tlie licence-Appellant not en-
titled to dalnages. 
Indian Easements Act, 1952-Sections 52, 53, 54-Definition of 
Licence-Grant of a light made by the grantor-Without a 'grant' no licence D 
can be created. 
Pursuant to acceptance of the offer made by the appellant, being the 
highest bidder, agreements were executed between the Government of 
Tamil Nadu and the appellant as per which right to collect "chank shells" 
from coastal sites was granted to the appellant for three years. Clause 7 
of the agreement empowered the Government to. terminate the lease 
E 
unilaterally at. any time without assigning any reason. The appellant 
started fishing operations in February, 1971, but in June 1971, the Govern-
ment terminated the lease as per clause 7 of the agreement. The appellant 
filed a suit claiming damages, interalia on the ground that the agreement F 
had actually created a lease of land and the clause, empowering the lessor 
to t~rminate the lease unilaterally is void and unforceable. Single Judge of 
the High Court held that the transaction was a licence coupled with 
interest and hence it was irrevocable and clause 7 of the agreement was 
unenforceable and as such the appellant was entitled to the entire damages 
claimed by him. The suit was decreed in terms of the plaint. On appeal the G 
Division Bench of the High Court set aside the decree and dismissed the 
suit holding that clause 7 of the agreement as valid and enforceable in view 
of the provisions of the Grants Act, 1895 and hence the appellant was not 
entitled to claim damages. Being aggrieved the appellant filed this present 
appeal. 
H 
413 
414 
SUPREME COURT REPORTS 
[1997] 2 S.C.R. 
A 
Dismissing the appeal, this court 
B 
HELD : 1. The combined effect of sections 2 and 3 of the Government 
Grants Act, 1895 is that terms of any grant or terms of any transfer of 
land made by a Government would stand insulated from the tentacles of 
any statutory law. Section 3 places the terms of such grant beyond the 
reach of any restrictive provision contained in any enacted law or even the 
equitable principles of justice; equity and good conscience adumbrated by 
common law if such principles are inconsistent with such terms. The two 
provisions are so framed as to confer unfetered discretion on the Govern-
ment to enforce any condition, limitation or restriction in all types of 
C grants made by the Government to any persons. The rights, privileges and 
obligations of any grantee of the Government would be completely regu· 
lated by the terms of the grant, even if such terms are inconsistent with 
the provisions of any other law. [ 418-B-D] 
Surja Kanta Roy Choudhary v. Secretary of State, AIR (1938) Cal. 229 
D and Raza Hussain Khan v. Saiyid Mohd., AIR (1938) Oudh 175, approved. 
State of U.P. v. Zahoor Ahmad, [1974] 1 SCR 344, relied on. 
2.1. It can not be held that the licence created by the agreement 
between the Government and the appellant is not a grant and hence the 
E provisions of Grant Act can not apply. It is true that the word 'grant' is 
not defined in the Grants Act, but it is quite evident that the word has been 
used in Act in its etimological sense and therefore should get its widest 
import. It could envelop within it everything granted by the Government 
to any person. Sections 52, 53 and 54 of the Indian Easement Act also refer 
F 
to licence as grant of a right made by the grantor. Without a grant in the 
general sense no licence can be created. Thus the licence which the appel-
lant obtained by virtue of the agreement would undoubtedly fall within the 
ambit of 'grant' envisaged in the Grants Act. [ 418-H, 419-A·B] 
G 
Mohsin Ali v. State of M.P., [1975] 2 SCC 122, relied on. 
Black's Law Dictionary, Eare Jowtt's Dictiona1y of English Law 
referred to. 
2.2. Even assuming that the agreement was a lease of land, still the 
appellant can not succeed because lease made by the Government is also 
H covered by the protection envisaged in Sections 2 and 3
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