Delhi High Court
Bal Sahyog vs Union Of India (Uoi) And Anr. on 14 October, 2003
Equivalent citations: 2003VIIAD(DELHI)608, 107(2003)DLT373
Author: Badar Durrez Ahmed
Bench: Badar Durrez Ahmed
JUDGMENT
Badar Durrez Ahmed, J.
1. The present writ petition has been filed by the petitioner aggrieved by the action of the respondents evidenced by their letter dated 09.04.2001 read with letters dated 18.06.2001 and 13.12.2002, whereby the respondents have refused to renew the lease of the petitioner society. The petitioner is a society which was formed in 1954 with the object of rehabilitating destitute children. Its activities centre around providing service and welfare to the needy and poor by conducting welfare and rehabilitation activities, including running of contract clubs, hobby centres, vocational training courses, homes and schools for socially and economically handicapped children, etc. In 1957, the petitioner society was registered under the Societies Registration Act, 1860. The petitioner was located at the premises which it occupies even today in Connaught Circus, New Delhi. The said premises were leased out to the petitioner by a Lease Deed executed on 11.08.1966 on behalf of the President of India for a period of 30 years w.e.f. 01.01.1965. It is the renewal of this lease and another related lease which is the subject matter of the present writ petition. The relevant clause in the lease which relates to renewal is clause 2 (viii) which reads as under:-
“(viii) The Lessee shall on the expiry of the said lease period of thirty years, be entitled to a renewal of the lease for a further period of thirty years, or less on terms and conditions to be mutually agreed upon before renewal of lease.”
2. The contention of the petitioner is that by virtue of the aforesaid clause, the petitioner being the lessee was, as a matter of right, entitled to a renewal of the lease for a further period of 30 years. Only the terms and conditions were to be mutually agreed upon before renewal of the lease. On the other hand, the respondents contend that the renewal of the lease was not automatic and even renewal had to be mutually agreed upon before the lease could be renewed. This is the short question which needs to be decided in this writ petition.
3. It needs to be pointed out at the outset that the said lease is not an ordinary lease and as mentioned in clause 7 thereof itself, the said lease has been granted under the Government Grants Act, 1895. As such, the said lease is a Government Grant and has to be construed as such.
4. Certain other facts also need to be noticed. The petitioner, after the said Lease Deed was executed, continued in the premises without any problem. On the said plot which had been leased out to the petitioner, a set of new buildings comprising of dining and recreation hall, hobby room, kitchen, etc, had been constructed by the respondent No. 1 as sanctioned by the Ministry of Industrial Development and Company Affairs by their letter dated 12.05.1967. The petitioner society requested the respondent No. 1 to grant to them a lease of the said new building at a nominal rent for the period ending 31.12.1994. In view of the fact that the petitioner was carrying on public and charitable activities, the said new building was also granted on lease to the petitioner by virtue of a Lease Deed executed on 25.07.1969. The lease of the said new building was for the period ending 31.12.1994, co-terminus with the lease of 1965. This second Lease Deed of 1969 also contained a similar renewal clause 2(viii) as the earlier Lease Deed which reads as under:-
“(viii) The Lessee shall on the expiry of the said lease period ending with 31st December, 1994 be entitled to a renewal of the lease for a further period of thirty years, or less, on the terms and conditions to be mutually agreed upon before renewal of lease.”
This lease of 1969 was also granted under the Government Grants Act, 1895 and, therefore, is also to be construed as a Government Grant.
5. Sometime towards the end of the 1980s and the beginning of the 1990s, an idea was mooted for declaring the petitioner, i.e., Bal Sahyog as a national institute. In this regard, several meetings were held and which were attended by high functionaries, including the Prime Minister of India. There is also correspondence on record between the petitioner and the respondents with regard to the declaration of Bal Sahyog (the petitioner society) as a national institute. Around this time, i.e., 1992-93, as the aforesaid leases were to expire in a few years time, the petitioner society through its then Chairman Smt Pratibha Singh, requested the respondent No. 1 for extension of the lease by a letter dated 24.11.1992. In reply thereto, by a letter dated 23.03.1993, the Minister of State for Industries, Government of India, Udyog Bhawan, New Delhi sent a letter to the Chairperson of the petitioner society that there was considerable time before the expiry of the lease and the matter could be looked into at a later stage and that the same would be taken up for review at an appropriate time. The petitioner thereafter repeated its requests for renewal. While the lease period had, in point of fact, expired on 31.12.1994, the petitioner was permitted to continue in the said premises by the respondent without any demur. On 19.03.1996, the petitioner again wrote to the respondents for renewal of the lease of the premises. By a letter dated 16.07.1996 issued by the Deputy Director, Office of the Development Commissioner, Small Scale Industries, New Delhi, the petitioner was informed that its request to extend the lease had not been considered and, therefore, the petitioner was requested to vacate the premises latest by 31.08.1996 as it was purportedly required for their departmental use. Even thereafter, the petitioner continued in the said premises and, in fact, the then Prime Minister (Sh. I.K. Gujral), by a letter dated 08.09.1997, even accepted the position of ex-officio Patron of the petitioner society. The petitioner continued to request for renewal of the lease. By a letter dated 17.03.2001, the petitioner once again wrote to the current Prime Minister of India requesting that suitable instructions be issued for the renewal of the lease, the proposal for which was already pending with the Ministry of Small Scale Industries, Government of India. However, the lease was not renewed and the petitioner received a letter dated 09.04.2001 issued by the Small Scale Industries, Service Institute, Government of India, Ministry of Industry, New Delhi, whereby the petitioner was asked to take steps and make necessary arrangements for vacation of the premises without delay. It was also indicated in the said letter that the same be treated as a formal notice for discontinuation of Bal Sahyog Bhawan activities at the end of the Training Session 2002-03. Although, the subject of the said letter dated 09.04.2001 was “Termination of Lease Agreement”, in effect, it was not a termination but merely a notice for vacation of the premises on account of the purported fact that the lease had not been renewed. In reply, the petitioner sent a letter dated 31.05.2001, inter alia, informing the respondents that as far as the question of the lease is concerned, the petitioner had already exercised its right for renewal of the lease under the said clause (viii) and, therefore, the lease ought to be renewed and that the aforesaid position be placed before the appropriate authority, including the Prime Minister for further extension of the lease and continuation of the courses already running under the Bal Sahyog. The respondent by a letter dated 18.06.2001 with reference to the petitioner’s letter of 31.05.2001 communicated to the petitioner that the petitioner’s request for extension of lease deed for further period cannot be acceded to as already communicated to the petitioner in the earlier letter of 09.04.2001. It is pertinent to notice that in this letter of 18.06.2001 again, the subject matter includes “Termination of Lease Deed”. In fact, in the letter itself it is indicated that the lease is being terminated in terms of clause (ix) of the lease, whereby the Lesser had the right to terminate the lease at any time after giving three month’s notice and the lessee was not entitled to claim any compensation or damage on that account. The letter dated 18.06.2001 reads as under:-
“GOVERNMENT OF INDIA MINISTRY OF SSI & ARI SMALL INDUSTRIES SERVICE INSTITUTE OKHLA, NEW DELHI-110 020 No: BEC/Home/1/2000 Dated:18th June 2001 Shri S.P. Singh, Director General Balsahyog, Connaught Circus, New Delhi-110 001 Sub: Termination of Lease deed & vacation of Building of Balsahyog Home Sir, I am to refer to your letter No. nil dated 31st May 2001 and to inform you that your request for extension of lease deed for further period cannot be acceded to as already communicated to you in our earlier letter of even number dated 9th April 2001. The AS & Development Commissioner [SSI] advice giving you a time limit of 2 years for completion of on going training/education to the existing trainees who have entered the 2nd and 3rd year of their training programme has already been conveyed to you. Therefore on completion of the existing training programmes the Balsahyog Home building may be vacated as per terms and conditions of the lease deed, laid down under clause 9, wherein “The Lesser reserves the right to terminate the lease at any time after giving three months notice and the lessee shall not claim any compensation or damage on that account.”
The above option has been exercised by this Institute. Questions have in fact also been raised on the relevance of the existing training programmes. The response to the training courses is declining. The age group of existing trainees is not suitable for sophisticated training involving use of Power/Electrical Equipments.
Yours faithfully,
-sd-
18/6/01 (G.S. Nangia)
Asstt. Director(Admn)
For Director”
6. Thereafter, with respect to the extending of Government assistance to the petitioner, the Minister of State (Ministry of Small Scale Industries), India by a letter dated 13.12.2002 indicated that the land and building which had earlier been given to Bal Sahyog on lease has since expired and that the said premises was required for expanding the activities of SISI, New Delhi, therefore, it was not feasible for the Government to allow Bal Sahyog to continue in the premises for another thirty years.
7. It was contended on the part of the respondents that the present writ petition is not maintainable in view of the fact that this is entirely a matter of contract and a writ petition is not a proper remedy. Mr. K.K. Sud (Learned ASG), who appeared on behalf of the respondents, placed reliance on the decision of the Supreme Court in the case of Bachhanidhi Rath v. The State of Orissa and Ors: and in particular on Para 8 which reads as under:-
“8. The management of the School was by resolution passed over to the Government. The Government was giving grant-in-aid to the School. The Government therefore managed the School. The Government made a uniform policy that teachers should be retired on attaining the age of 58 years. There is no right to remain in service. If a right is claimed in terms of a contract such a right cannot be enforced in a writ petition.”
8. In this regard, Mr. Vikas Singh, learned counsel appearing on behalf of the petitioner, submitted that what was being considered was a Government Grant and not an ordinary lease under the Transfer of Property Act. Furthermore, the question in this petition was with regard to the arbitrary nature of the functioning of the State in respect of the lease made in favor of the petitioner. On the one hand, several Prime Ministers of India have been Patrons of the society and there is no complaint with regard to the commendable work that the petitioner society has put in and throughout the indication has been for expanding the activities of the petitioner as well as granting it a national status. On the other hand, the respondents are arbitrarily and without any plausible reason refusing to renew the leases. Mr. Singh submitted that this behavior on the part of the respondents is, to say the least, inconsistent and unreasonable. Such action on the part of the respondents would certainly be subject to judicial review under article 226 of the Constitution. I am in agreement with the submissions of the learned counsel for the petitioner that this not one of those cases which are purely of a contractual nature and which fall within the ambit of private law entirely. This is a case which involves elements of public law and, therefore, a writ petition such as this cannot be thrown out at the threshold on the ground of maintainability. The rule of alternative remedy is a rule of prudence and in appropriate cases a Court exercising jurisdiction under Article 226 of the Constitution, can exercise its discretion to entertain a writ petition even where there is an alternative remedy available. In the context maintainability and consideration of renewal clauses reference may also be made to the decision in Biman Krishan Bose v. United India Insurance Company Ltd and Anr: , wherein the Supreme Court held that even in areas of contract relations, the State and its instrumentalities are enjoined with the obligation to act with fairness and in doing so can take into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration while arriving at a decision. Arbitrariness should not appear in their actions or decisions. In that case, the Supreme Court found that there was arbitrariness in the actions of an insurance company which refused to renew a mediclaim policy of the insured on the ground of his past conduct. Here, also, the respondents are not renewing the leases. The petitioner alleges that the non-renewal is arbitrary, unreasonable, unfair and contrary to the conduct of the Respondents as well as to the renewal clauses which have to be construed according to their own tenor, statutory provisions notwithstanding, being parts of government grants. Thus, in these circumstances, it cannot be held that the writ petition is not maintainable.
9. The second ground of objection taken by the respondents is that as far back as on 16.07.1996 the respondents had indicated that the lease will not be renewed. According to the learned counsel for the respondents, if the petitioner had sought specific performance of the lease deeds, it could have filed a suit therefore during the three-year period of limitation. It chose not to file such a suit. The period has now expired. Accordingly, the petitioner cannot now by way of a writ petition be permitted to obtain the reliefs which it could have got by way of filing a suit for specific performance but chose not to file. The respondents placed reliance on the decision of the Supreme Court in the case of State of Madhya Pradesh & Anr v. Bhailal Bhai & Ors: . In that case the Supreme Court held as under (at para 21):-
“?the provisions of the Limitation Act do not as such apply to the granting of relief under Art. 226. It appears to us however, that the maximum period fixed by the Legislature as the time within which the relief by a suit in a civil court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Art. 226 can be measured. The Court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the Court to hold that it is unreasonable.”
10. I am not impressed with this objection either. First of all, as indicated in the aforesaid decision of the Supreme Court, the period of limitation does not strictly apply to writ petitions. However, analogous principles are taken into account for determining whether a writ petition is to be thrown out on the ground of delay or laches. The facts indicated above demonstrate that the petitioner has throughout been representing to the respondents for renewal of the leases as also with regard to the expansion of the activities of the petitioner society. This has engaged the consideration of the respondents from time to time and the petitioner have continued in the premises in question. It is only in 2001 and 2002, as indicated above, that the respondents took a firm decision to evict the petitioner from the premises in question and not to renew the lease. Therefore, it cannot be said that the petitioner has remained idle and has not bothered to take any action in the matter. In point of fact, the cause of action arose lastly in 2002. Viewed in the light of these facts, it cannot be said that the petition is delayed. The writ petition, therefore, cannot be thrown out on the ground of delay or laches.
11. I am, therefore, left with the question as to whether under the said leases and in particular clause 2 (viii) thereof, the petitioner was entitled to renewal? This question has two facets which need to be examined. First of all, whether the right to renewal was absolute and, secondly, whether mutuality applied only to terms and conditions and not to the right to renewal. Before dealing with this question, it would be appropriate to refer to various decisions cited by the learned counsel for the petitioner which are as under:-
i) Maharaja Bahadur Sir Pradyot Coomar Tagore v. Maynuddin Mia: . In this decision, the Calcutta High Court was concerned with the interpretation of a renewal clause in a Kabuliat. The renewal clause therein was as under:-
“After the expiry of the term if fresh doul kabuliat is not filed within one year according to rent that will be assessed after measurement and preparation of jamabandi according to the customary rate payable in the pargana (parganar chalit), then the jote will pass to landlord’s khas collection.”
In this context, the Court considered the law as to renewal clauses and it was observed as under:-
“Thus, the position is that we are thrown back on the kabuliat in order to give to the renewal clause its true interpretation. The law as to renewal clauses is well-summarized in 16 CLJ 217 (Secretary of State v. A.H. Forbes). It is there pointed out that if the option in a lease does not state the terms of renewal, the new lease will be for the same period and on the same terms as the original lease in respect of all the essential conditions thereof, except as to the covenant for renewal. This is the ordinary law as to a renewal clause, but what is contended for the tenants defendants is that this is not an ordinary renewal clause. The terms of lease make it clear that the tenants are to continue after the expiry of the term until there is re-assessment at the instance of the landlord and thereafter the renewal of the lease subject to the tenant consenting to the re-assessment within a year. It is only if the tenant does not consent to such re-assessment that the landlord would have right of re-entry and not otherwise.
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx ….Having regard to all these considerations, I find that the true meaning of the renewal clause in the kabuliat is not that the tenants are not entitled to one such renewal, but that they are entitled to such a renewal clause in all succeeding leases as a substantive part of the conditions of the tenancy.”
ii) Baker v. Merckel: [1960 (1) All ER 668] (CA). In this case, it was decided that as regards a renewal clause, the exercise of the option for renewal if it was so provided by the renewal clause took effect as a unilateral act for which the consent of the Lesser was not required and accordingly it resulted in privity of the contract continuing between the Lesser and the Lessee throughout the extended term of the lease.
iii) Girindra Chandra v. Kamini Nath: AIR 1949 Assam 78 (DB). In this case, the Lesser had sought the eviction of the lessee on the ground that the lease had been determined. The defense taken by the lessee was that he was not liable to be evicted because the plaintiff had agreed, by the terms of the lease to give him an option of renewal of the lease at the determination of the original lease and that he had exercised that option before the expiry of the initial lease period and that he was prepared to take a fresh settlement in accordance with the terms of the agreement as to renewal. The actual provision as to renewal in that case was as under:-
“After expiry of the first lease, I shall take second lease of these lands by paying proper rent. I shall not be entitled to claim possession of the land without taking settlement. After expiry of the due date, I shall give up possession of the lands without notice.”
A Division Bench of the High Court of Assam held that once a Lesser agrees to a provision in the lease that the lessee will have the option to ask for a renewal at the determination of the lease for a further period, the provision must be given effect to without reference to any other co-lateral enquiry. It was further observed as under:-
“If the provision was not intended to give defendant 1 an option of refusal but was merely intended to make provision for a fresh agreement between the parties at the determination of the lease, we think there was no object in making the provision at all.”
iv) H.V. Rajan v. C.N. Gopal & Ors: AIR 1961 Mys 29. In this case also, the question of interpretation of a renewal clause came up for consideration. A Division Bench of the said High Court observed as under:-
“(6) This takes us to the renewal clause i.e. clause 3rd of Ex.L. The second defendant claims that the lease in his favor stood duly renewed on 1-3-1947 for a further period of 5 years as per the renewal clause. The said clause reads:
“After the expiry of the period of 5 years fixed under this lease the lessees shall have the option of 5 years but subject only to such terms and conditions as may be mutually agreed upon.”
The parties are at controversy as regards the true meaning of this clause. According to the plaintiff, the clause means that the Lesser and the lessee may choose to renew the lease if they are able to agree on the terms. In other words he contends that it was merely an agreement to negotiate for a fresh lease. Ordinarily the renewal clause in a lease deed is an important term of the agreement. Courts will be reluctant to ignore that clause on the ground that it is vague, unless on a reasonable construction no meaning can be attached to it.
We think that the parties to Ex.L did attach some meaning to that clause. What then is its import? One way of reading this clause is, that the parties had agreed to renew the lease, for a further period of five years in accordance with the original terms, unless otherwise modified by mutual agreement. The relevant portion of the clause says: “the lessees shall have the option of five years but subject only to such terms and conditions as may be mutually agreed upon.” An agreement to renew the lease without more must be deemed to be an agreement to renew as per the original terms.
This appears to us to be a reasonable interpretation to be placed on clause 14 of Ex. L. Even if we agree with the plaintiff’s contention that the renewal provided is dependent on the agreement between the parties on other terms, on the basis of decided cases, we have no hesitation in reading that clause as provided for an agreement between the parties on terms reasonable. If the parties are at variance as to those terms then the Courts will step in. See Robinson v. Thames Mead Park Estate Ltd. (1947) 1 Ch 334, Foley v. Classique Coaches Ltd. 1932-147 LT 503; Jardine, Skinner and Co. v. Rani Surat Sundari Debi, 5 Ind App 164 (PC); Prodyot Commar Tagore v. Maynuddin Mia . Authorities on this point can be multiplied. But we see no necessity for it.”
v) Sudhir Kumar v. Baldev Krishna Thapar: 1970 (2) SCJ 377. In this case, the Supreme Court was, inter alia, considering the following renewal clause:-
“That at the time of expiry of the period of three years the promisors with the consent and consultation of promiseshall be entitled to take the cinema on contract for further two years on the above conditions provided that there has been no breach of any condition laid down in the agreement.”
While considering this, the Supreme Court held and observed as under:-
“A term in a lease relating to renewal is independent of the duration of the lease fixed under the lease deed. The renewal obtained by the exercise of the option given under the lease is an extension obtained by the exercise of an independent power. Therefore there is no force in the contention that because the compromise had fixed the period during which the defendants could continue as lessees, the renewal clause in the original lease deed did not become one of the terms of the agreement. We are unable to consider the clause in the compromise referring to the original lease as a barren clause or that it is not wide enough to reach the renewal clause.”
The learned counsel for the petitioner also placed reliance on paragraph 113 of the Halsbury’s Law of England, 4th Edition, Vol. 27 which reads as under:-
“113. Option for future lease:- A lease which creates a tenancy for a term of years may confer on the tenant an option to take a lease for a further time. Such an option constitutes an offer which the landlord is contractually precluded from withdrawing so long as the option remains exercisable, and it may be possible to exercise the option by conduct.”
12. From the aforesaid decisions it becomes clear that a renewal clause is to be given full effect to. If the option of renewal is given to the lessee under the lease, his/her unilateral act of exercising that option will have the effect of extending the lease, the protestations, if any, of the Lesser notwithstanding.
13. The renewal clauses in the present case form part of leases which are Government Grants. By virtue of Section 2 of the Government Grants Act, 1895, it is clear that the Transfer of Property Act, 1882 shall not apply to such leases and that, as indicated in Section 3 of the said Government Grants Act, 1895, all provisions, restrictions, contentions and limitations ever contained in such grants shall be valid and take effect according to their tenor, any rule of law, statute or enactment or the legislature to the contrary notwithstanding. This is made clear by the Supreme Court in Hajee S.V.M. Mohd. Jamaludeen Bros. & Co. v. Govt. of T.N.: as under:-
“9. Section 2 of the Grants Act insulates all grants and all transfers of land or any interest therein made by the Government from the checks of the provisions of Transfer of Property Act. Section 3 of the Grants Act protects the terms of such grant from the provisions of any other law. We extract the above two provisions hereunder:
‘2. Transfer of Property Act, 1882, not to apply to Government grants.–Nothing in the Transfer of Property Act, 1882, contained shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein heretofore made or hereafter to be made by or on behalf of the Government to, or in favor of, any person whomsoever; but every such grant and transfer shall be construed and take effect as if the said Act had not been passed.
3. Government grants to take effect according to their tenor.–All provisions, restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding.’
10. The combined effect of the above two sections of the Grants Act 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 unfettered discretion on the Government to enforce any condition or limitation or restriction in all types of grants made by the Government to any person. In other words, the rights, privileges and obligations of any grantee of the Government would be completely regulated by the terms of the grant, even if such terms are inconsistent with the provisions of any other law.”
Thus, while interpreting and examining the construction of such grants, the intention of the parties to the document has to be gathered by the words used by the parties themselves. The parties must be presumed to have used the words in their strict grammatical sense. Where there is ambiguity, it is the duty of the Court to look at all parts of the documents to ascertain what was really intended by the parties. However, the rule that has to be borne in mind is that the document being the grantor’s document, it has to be interpreted strictly against him and in favor of the grantee. However, it is only if the meaning is not otherwise clear that there is scope for the applicability of the rule that all deeds are to be construed against the grantor and in favor of the grantee (See: Sahebzada Mohd Kamgar Shah v. Jagdish Chandra Deo Dhabal Deb AIR 1960 SC 9531). Where doubt arises upon the construction of a grant, and it can be removed by construing the deed adversely to the grantor, this will be done. For, it is a maxim of law that every man’s grant must be taken most strictly against himself–“verba fortius accipiuntur centra pruferentem”. The aforesaid rule, however, does not come into operation until a doubt arises upon the construction of an instrument [See: Sahebzada Mohammad Kamgarh Shah (supra)]. It must be noted that in England in the case of a grant by the Crown, the rule is reversed and the grant is taken most strongly against the grantee and in favor of the Crown [See: Mosan Ali v. State of Madhya Pradesh: ]. But, that English rule qua crown grants has no applicability in India as held by the Supreme Court in the case of Delhi Development Authority (supra) (at pages 2615 and 2616):-
“30. We doubt whether a lease granted by the Secretary of State for India even before 1950 could be interpreted today by relying upon any special rule of construction applicable to leases by or on behalf of the British Sovereign. Indian citizens are now governed by the Indian Constitution on matters relating to the Sovereignty. It may be that a rule or construction traceable to the prerogatives of the Sovereign, in the feudal age, is no longer applicable in a Democratic Republican State, set up by our Constitution, when dealing with its citizens. There appears to be no just and equitable ground why the State as the Lesser grantor, with all its resources and experienced draftsman and legal advisers and enjoying a practically invincible bargaining position as against a citizen lessee grantee, should enjoy the benefit of some nebulous and unjust rule of construction so as to enable Courts to rewrite its defectively drafted deeds in its favor. We think that it is not the ordinary rule of construction, applicable to grants capable of two constructions, which could be obsolete in this country today, but, it is the reversal of that rule in the case of the grant by the Sovereign-a feudal relic-which could more aptly be said to be inapplicable here today. And, as we have already pointed out, even that feudal relic was subject to the exception that it could not stand in the way of evenhanded justice where Sovereign had received valuable consideration. The lease before us was for valuable consideration.”
Thus, it is clear that even in the case of a Government grant, in case of any ambiguity, the same has to be construed against the grantor and in favor of the grantee.
14. In view of the aforesaid discussions, it is clear that the renewal clauses in the present leases clearly stipulate that the lessee shall be entitled to a renewal of the lease for a further period of thirty years or less. This clearly indicates that the petitioner was by the terms of lease entitled to a renewal for a further period. The second portion of the clauses which says “all terms and conditions to be mutually agreed upon before renewal of lease” only refers to the terms and conditions. As a matter of right, the petitioner was entitled to renewal. The only thing that was left to be considered were the terms and conditions thereof which were to be mutually agreed upon before renewal of the lease. In point of fact that the petitioner had requested for extension of the lease even prior to the termination of the same. Therefore, it had exercised its option of renewal. The terms and conditions were to be mutually agreed upon. The respondents neither expressed any terms and conditions contrary to the earlier leases nor did they “agree” to the renewal. In fact, it was not for the respondents to agree or disagree. Once, the petitioner exercised its option calling for renewal, there was no option left with the Respondents but to renew the leases for the further period. Even if it is assumed that the renewal clauses are ambiguous, that interpretation would have to be given to them which would be in favor of the grantee, i.e., the petitioner herein and against the grantor, i.e., the Government of India. In either case, the conclusion is the same. The petitioner was entitled to renewal as a matter of right. It exercised its option within the period of the first lease and, therefore, there was no option left with the respondent No. 1 but to renew the lease subject, however, to agreement on terms and conditions. If no terms and conditions were mutually agreed upon, then the original terms and conditions would apply.
15. In these circumstances, the letters of the respondents refusing to renew the leases in favor of the petitioner and in requiring the petitioner to vacate the premises in question are illegal and are hereby set aside and quashed. The respondents are directed to, within a period of sixty (60) days from the date of this judgment, execute fresh leases in favor of the petitioner for the period opted by the petitioner w.e.f. 01.01.1995. Strictly speaking the fresh leases should be on the same terms and conditions as the original leases as the respondents had not communicated any contrary terms and conditions. But, in view of the fact that the respondents did not “agree” to renewal on the impression (albeit erroneous) that they had the option to accede to or not to accede to renewal, I think it would be appropriate that the parties be given an opportunity of mutually settling the terms and conditions for the fresh leases. It goes without saying that these terms and conditions will have to be reasonable and finalized as early as possible so as to enable the execution of the fresh leases within the period of sixty (60) days indicated above.
16. The writ petition is accordingly allowed. There shall be no order as to costs.