STATE OF ASSAM & ORS versus BANSHIDHAR SHEWBHAGWAN & CO.

Citation: [1982] 1 S.C.R. 554 · Decided: 01-09-1981 · Supreme Court of India · Bench: V.D. TULZAPURKAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
554 
STATE OF ASSAM & ORS 
v. 
B 
BANSHIDHAR SHEWBHAGWAJ:' & CO. 
September /, 1981 
(V.0. TULZAPURKAR AND A. V ARADARAJAN, JJ.] 
Lta$t of Government land-Land leased to respondenJ..--Respondent deV.elo-
C~ 
ped the land at great expense-Lease not renewed-Government claimed that land 
was needed/or defence purposes-Later /pase sought to be auctioned-Land requi-
red by Government for same purpose-Action whether ma/a fide -Auction whether 
for a collateral purpose. 
On a part of a large area of land acquired by the Government during 
World War II an aerodrome was constructed and on the remaining 300 odd acres 
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\Vhich remained unused a thick jungle grew over the years. 
E 
f 
Pursuant to tl1e decision of thr Government of India to lease out the un-
used portion of the land, the respondent entered into an agreement with the 
Government and took possession of tJ·,e land after paying one year·s rent in 
advance. 
The respondent alleged that, after taking possession of the land, he had 
spent a large sum of money in clearing the jungle and makjng it a well managed 
tea garden. He also alleged that the concerned Government officials were 
putting off execution of the lease deed on some pretext or the other. 
Having 
had no satisfactory reply from the Government, the respondent moved the 
Government of India through a Member of Parliament who was informed that 
the land was required for defence purposes and that it would not be possible to 
ex.tend the lease. A few months later the Defence Minister informed the Member 
of Parliament that the Government had decided to auction the lease-hold right 
on an annual basis in order that possession of the land could be resumed for 
defence purposes at short notice. 
A notice for public auction was thereafter 
issued. 
The respondent filed a writ petition in the High Courl and obtained an 
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order restraining the appellants from auctioning the land. 
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In the meantime the respondent filed title suits against the Government. 
The respondent contended that the auction notice was ma/a fide because~ 
having found 
that the jungle had been cleared and the land had been 
developed into a workable tea garden, the Government wished to lease the land 
to the highest bidder for getting a large amount of money and that this was for a 
collateral purpose. The High Court upheld this contention. 
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ASSAM v. BANSHIDHAR (Varadarajan, J.) 
555 
Allowing the appeal, 
HELD : If any authority exercised in bad faith or for collateral purpose 
power conferred on it by law such action would be struck down as an abuse of 
power and a fraud on the statute. [559 E-F] 
In the present case however there is much evidence on record to establish 
that there was no lack of bona/ides on the part of tbe Government and that the 
action sought to be taken by it was not for a collateral purpose. Had the atten .. 
tion of the High Court been drawn to the. material on record, there was no possi• 
bility of the High Court coming to the conclusion that it did. 
Although in 1962 the Deputy Minister for Defence in the first instance 
informed the member of Parliament, who interceded on behalf of the respondent 
that the land was required for defence purposes and for that reason it would not 
be possible to extend the then current lease but later stated that it was decided to 
lease out the land to the highest bidder by way of public auction on a yearly basis 
and the Deputy Commissioner in the affidavit had stated that the land was not 
required for defence purposes until 1964, the need for defence purposes did arise 
when the war with Pakistan broke out in 1965. It could not, therefore, be said 
that the Government did not need the land for defence purposes in 1966 when 
the order was issued. Defence requirements depend on many unforeseeable 
factors. [559 F-H] 
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That apart, the appellants did state right from the beginning that the lease 
was subject to the condition that whenever the Government needed the land for 
defence purposes it would be determined by notice without payment of compen· 
sation and that the Government was not bound to renew the lease. (560 F-G] 
There is, therefore, nothing to support the finding of the High Court that 
the Government had never put forward the plea that the land would be required 
for defence purposes at any stage in the title suits and that it was putting forward 
such a case only as a ruse to auction the land for a larger amount of rent. [561H] 
CIVIL

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