SRI RAM BUILDERS versus STATE OF M.P. & ORS.

Citation: [2014] 5 S.C.R. 686 · Decided: 25-04-2014 · Supreme Court of India · Bench: S.S. NIJJAR · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
[2014] 5 S.C.R. 686 
SRI RAM BUILDERS 
v. 
STATE OF M.P. & ORS. 
(Civil Appeal No. 4896 of 2014) 
APRIL 25, 2014. 
[SURINDER SINGH NIJJAR AND A.K. SIKRI, JJ.] 
Judgments: 
c 
Rule of merger - Held: SLP having been dismissed in 
limine without recording any reason, judgment of High Court 
cannot be said to have merged with order of Supreme Court. 
Administrative Law: 
D 
Public authority - Chief Secretary of State directed by 
1 
High Court to settle issue of cancellation of lease in favour 
of MPRTC - Appellant submitted representation before Chief 
Secretary -
Held: Appellant having not challenged 
competence of Chief Secretary to decide the issue, cannot 
E be permitted to say that directions issued by Chief Secretary 
are without jurisdiction. 
Constitution of India, 1950: 
Art. 226 - Writ petition for enforcement of contract with 
F 
instrumentality of State - Contract between appellant and 
MPRTC to construct a bus stand-cum-commercial complex 
on land leased to MPRTC by /DA - Held: Scope of judicial 
review is very limited in contractual matters even where one 
of the contracting parties is the State or an instrumentality of 
G 
the State - High Court has rightly observed that appellant can 
seek appropriate relief by way of a civil suit - High Court in 
exercise of its jurisdiction under Art. 226 would not normally 
grant relief of specific performance of a contract. 
H 
686 
SRI RAM BUILDERS v. STATE OF M.P. 
687 
Contract: 
Contract between appellant and MPRTC to construct a 
bus stand-cum-commercial complex on land leased to 
MPRTC byJDA - Held: At no stage, appellant had any privity 
A 
of contract with /DA - MPRTC entered into a BOT contract 
8 
with appellant contrary to the terms and conditions of lease 
which provided specifically that land shall be used only for 
bus stand - MPRTC had no regal right to create any further 
right in favour of appellant with regard to receiving of premium 
on constructed units sold to third party(ies) - Even otherwise, 
C 
by efflux of time the said /ease period expired on 21.1.2012 
-
So far as the breach of contract is concerned, appellant 
will have no cause of action against /DA as there is no privity 
of contract between the parties - Appellant shall be at liberty 
·to seek its remedies against MPRTC for breach of contract -
" 
So far as the specific performance is concerned, the entire 
D 
purpose of the contract has been frustrated by subsequent 
events. 
Subsequent Events: 
Contract between appellant and MPRTC to construct a 
bus stand-cum-commercial complex on land leased to 
MPRTC by /DA - Subsequently lease in favour of MPRTC 
expired - Possesson of land delivered to /DA -
Held: 
MPRTC would not be in a position to continue with the lease 
as it is heavily indebted - Property of the Corporation has 
been attached by various creditors - Even the proposed site 
where the bus stand-cum-commercial complex was to be 
constructed is under attachment. 
E 
F 
A lease deed dated 2-11-1981 was entered into G 
between Madhya Pradesh Road Transport Corporation 
(MPRTC) and Indore Development Authority (IDA). 
Possession of the land was handed over to MPRTC on 
22-1-1982. Initially, the lease was taken by the MPRTC for 
the purpose of a bus stand. On 8-11- 2001, the Council 
H 
688 
SUPREME COURT REPORTS 
[2014] 5 S.C.R. 
A of Ministers of the State authorized construction of a 
commercial complex on the land under build, operate and 
trade (BOT) Scheme. A tender notice was issued on 
13.4.2002. The bid of the appellant was found to be the 
highest. An agreement was entered into between MPRTC 
8 and the appellant on 4.2.2004 whereunder the promoters/ 
builders had the right to market the saleable space in the 
commercial complex and collect premium on such 
allotment from prospective buyers. On 25.5.2004, MPRTC 
deposited the lease rental with IDA. A formal lease was 
c executed on 26-5-2004, for 30 years. The leased land 
(plot) was to be used only for the bus terminal. It was 
specifically provided that the plot could not be divided. 
On 18.12.2005, the State Government decided to wind up 
the MPRTC. However, the proposal of the State 
0 Government was not approved by the Ministry of 
Shipping and Road Transport, Government of India and 
the State Government was informed of the decision by 
letter dated 17.11.2008. Meanwhile, when the State 
Government intended to close down MPRTC, the 
appellant filed W.P. No. 63 of 2005. On 5.8.2005, the High 
E Court issued dire
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