JUDGMENT
S.N. Bhattacharjee, J.
1. This writ appeal has been directed against the Judgment and Order dated 11.2.99 passed by the single Judge of this court in writ’petition No. 16505(W) 1995 whereby the order dated 27th August, 1998 issued by the respondent No. 3 renewing a lease for grant of ferry service in favour of the respondent No. 7 was set aside.
2. In a public auction held in August, 1995 for grant of lease in respect of Chandernagore Rantghat to Jugaddal Ghat ferry service the respondent No. 7 being the highest bidder was granted such lease for a period of three years from September 1, 1995 to August 31, 1998 by the respondent No. 1 to 3 and an agreement of lease was also executed and registered between Chandernagore Municipal Corporation (respondent No.l) and the respondent No. 7. The deed granted liberty to the lessee to apply for renewal of the lease after its expiry on terms and conditions incorporation in Clauses 31 to 33 of the deed. In terms of clause 31 of the said agreement, the respondent No. 2 was given authority to renew the lease provided such application for renewal is made at least 3 months before the expiry of the said lease. On August 20, 1998, the writ petitioner applied for being granted such a lease after its expiry on August 31, 1998 thereby offering more generous sum of Rs. 1,75,000/- per year. But the offer of the writ petitioner was not honoured by the respondent Nos. 1,2 and 3 who by a letter dated 27.8,98 address to the respondent No. 7. renewed the lease for another term of 3 years in favour of the respondent No. 7 at the rate of Rs. 85.000/-for the 1st year, Rs. l.OO.OOO/- for the second year and Rs. 1.10.000/- for the third year. The writ petition was filed challenging the order of renewal of the lease dated 27.8.98 passed by the respondent Nos. 1, 2 and 3.
3. The respondent Nos. 1, 2 and 3 by filing affldavlt-ln-opposltlon justified their action and denying the allegations in the petition. The respondent No. 7 also by filing affldavit-in-oppositlon and supplementary affidavit asserted that he opted for renewal on May 2, 1998 and then on 6.8.98 and that the order of renewal being legal and valid the writ petition is devoid of any merit.
4. The learned trial Judge accepted the contention of the writ petitioner that the auction having been held for grant of lease for 3 years only, no
clause for renewal could be incorporation in the subsequent deed of agreement, that the application for renewal not having been made at least 3 months before the date of expiry of the lease and in view of the terms and conditions set out in clause 33 of the deed of agreement the purported renewal clause cannot be termed as a renewal clause at all and that the respondent Nos. 1. 2 and 3 acted illegally in extending the lease without calling for public auction. On such findings, the writ petition was allowed.
5. The learned counsel for the appellant has argued that the learned trial Judge failed to appreciate that there is no provision in Chandernagore Municipal Corporation Act prescribing mode for granting of lease for ferry service and as such there was no violation of legal duty on the part of the respondents nor there was any infringement of legal right of the petitioner. He has further argued that the Bengal Ferries Act, 1885 have no application to this case and that writ Jurisdiction cannot be invoked for declaring the lease or any clause thereunder illegal and the writ court cannot grant relief under section 34 of the Specific Relief Act. The learned counsel for the respondent has supported the Judgment of the learned trial Judge arguing that it is mandatory under the Ferry Act to hold a public auction to settle the lessee for the said purpose, that the Corporation Authorities cannot deal with public property arbitrarily in the name of exercising discretion without observing any principle and further that the order for holding auction would widen opportunities of many residents within municipal area to participate in the auction.
6. It has been revealed from the materials on record that the respondent tendered his offer on 20.8.98 for obtaining the lease hold right registering his willingness to pay a sum of Rs. 1.75.000/- in advance for each year, for the next three years a sum of Rs. 5.25.000/- and even more amount which would be required when the decision of the Corporation to expend the lease for the next three years with effect from 1.9.98 was already taken on 13.8.98. It is, therefore, clear that on the date of making the offer by the writ petitioner the matter of lease for ferry service was already disposed of and the petitioner had no subsisting right on the date of the offer. If at all.
7. It further appears from section 4 of Bengal Ferries Act, 1885 that the Act shall not apply to any ferry deemed or declared.to be a municipal ferry under the provisions of Bengal Municipal Act, 1932. It also appears from the Chandernagore Municipal Corporation Act itself that there is no provision directing or requiring the Corporation Authorities to observe or follow any procedure in the decision making process of granting lease in the matter of ferry services. From the pleadings on affidavits and the annexure appended thereto. It clearly appears that the respondents held public auction, granted the lease to the highest bidder, entered into an agreement for lease stipulating various types of conditions regarding satisfactory service for ensuring safety and security of the public using the ferry service and also incorporation a clause for exercising an option for renewal. The option of renewal was accepted by the mayor-in-council in a meeting held on 13.8.98 before expiry of the lease and before the offer of the petitioner.
8. It, therefore, cannot be said that the respondent Corporation acted in violation of any statutory requirement or obligation in dealing with the ferry service nor that It infringed any existing legal right of the writ petitioner.
9. What weighed with the learned trial Judge was that the appellant stated in the affldavit-ln opposition that he exercised option of renewal on 6.8,98 whereas in supplementary affidavit he claimed that he exercised option by a letter dated 2nd May, 1998 although the letter of the Corporation dated 27.8.98 referred to the appellant’s letter dated 6.8.98 whereby option was exercised. The deed of agreement incorporated a stipulation that the application for renewal must be made three months before the expiry of the lease and a further stipulation that mere application before three months would not automatically give the appellant any right to have the renewal of the lease. From this the learned trial Judge was in doubt whether the application for renewal was made three months before the expiry of the lease and held that agreement virtually did not contain any renewal clause particularly when such clause is garbed with a cloak of various taboos.
10. It is to be noted that the supplementary affidavit was not counteracted by further any affidavit in opposition at the instance of writ petitioner and it was perhaps not possible for him to do so. It is difficult for the writ petitioner to enter into such a dispute whether actually any application for renewal was made on May 2, 1998. The fact, however, is that the lessor and lessee accepted the prayer of renewal before the petitioner came into the picture.
The clause 32 of the deed reads as follows :-
“Similarly the mayor shall have the right to ask for renewal of the agreement on the same terms and at such rate as he may think fit before expiry of two months of the present lease. In the event the Izaradar is not agreeable the mayor shall have the right to ask the lessee to run the ferry service for such period as he may be required to do i.e. until fresh auction is held the ferry ghat is settled with new Izaradar and the present Izsradar shall be bound to run the ferry [page 11} Service until such settlement of new agreement for such period as he may be asked for in the interest of public in general. The Izaradar shall intimate in writing as to whether in willing/unwilling to renew the agreement within 15 days from the date of receipt of such requisition from the Mayor under this clause.”
11. There is nothing to show from the Act or rules made therunder that incorporation of such a clause of renewal is not within the jurisdiction of the Corporation. Only because the writ petitioner came up with a more generous offer and that ofter has been rejected in view of the renewal of lease it cannot be held at all that his right to participate, in the auction has been infringed or that the respondent-corporation acted in violation of statutory obligation that law cast upon them.
12. It is well-settled that the writ petitioner must show that he has a legal right to the performance of the legal duty (as distinguished from discretion) by the party against whom the mandamus is sought and such right must be subsisting on the date of petition. (AIR 1962 SC 1183, Kalayan Singh v. State of V.P.. AIR 1962 SC 1183).
13. We are of the opinion that the writ petitioner (respondent No. 1) being an intending bidder at a public auction would have been entitled to get an order under the writ Jurisdiction if the authority withholding auction or in granting the lease or granting renewal thereof instead of holding auction acted contrary to the statute or rules under which the auction had to be held or renewal was to be granted.
14. In view of the above discussion we hold that the learned trial Judge fell in error in passing the order impugned and accordingly, the said order is set aside. The appeal is allowed. No costs.
S.B. Sinha, J.
15. Although I agree with the operative portion of the Judgment Just now delivered by my learned brother, 1 would like to assign my own reasons in support thereof.
16. A bare perusal of the writ application would show that principal ground upon which the order of Chief Executive Officer dated 27.8.98 was sought to be quashed or set aside, was that the lease had been granted without following the provisions of the Bengal Ferries Act, and without inviting any public auction. It is, however, admitted in the writ application that a lease had been granted in favour of the appellant herein in August 1995, after holding an auction, wherein he became the highest bidder. No plea had been taken in the writ application to the effect that the notice inviting tender did not contain any clause that the respondent municipal corporation would be entitled to renew the lease for a further period of 3 years. In absence of such a pleading, it was not permissible for this court to go into the aforementioned question. It may be true that distribution of public largess or auction of public property must be done in a fair and reasonable manner, which would include laying down of the terms and conditions of holding such auction. It may or may not be, as no materials had been produced before this court to show, that a stipulation has been made in the notice inviting tender to the effect that the municipal corporation would be entitled to renew the lease for such period or periods as it may think fit and proper, but assuming for the sake of argument, even if it be accepted that such a clause did not occur in the notice inviting tender, the said lease had been executed in favour of the appellant by Chandernagore Municipal Corporation as far back hi the year 1997, it his not been disputed that the said instrument of lease contains a renewal clause and also provides for the modalities thereof. As, in fact such a concluded contract had been entered into by and between Chandernagore Municipal Corporation and the appellant herein, the appellant might have proceeded to make investment on the basis of such promise made in the deed of lease in terms of the promise or on the basis of a legitimate expectation that subject to the fulfilment of all conditions in the lease as provided for therein, the lease shall be renewed. It is not further correct to contend that under no circumstances public properties can be given on lease without holding public auction. Although holding of public auction in such matters would fulfil the criteria of Article 14 of the Constitution of india, in special situation, a deviation is also permissible. Reference in this connection my be made to M.P. Oil Extraction & Anr. v. State of M.P., reported in (1997) SCC 592, wherein the apex court, fnter alta, held:
“The renewal clause in the impugned agreements executed in favour of the respondents does not also appear to be unjust or Improper. Whether protection by way of supply of sal seeds under the terms of agreement requires to be continued for a further period, is a matter for decision by the State Government and unless such decision is patently arbitrary, interference by the court is not called for. In the facts of the case, the decision of the Slate Government to extend the protection for further period cannot be held to be per se irrational, arbitrary or capricious warranting judicial review of such policy decision. Therefore, the High Court has rightly rejected the appellant’s contention about the invalidity of the renewal clause. The appellants failed in earlier attempts to challenge the validity of the agreement including the renewal clause. The Subsequent challenge of the renewal clause, therefore, should not be entertained unless it can be clearly demostrated that the fact situation has undergone such changes that the discretion in the matter of renewal of agreement should not be exercised by the State. It has been rightly contended by Dr. Singhvi that the respondents legitimately expect that the renewal clause should be given effect to in usual maner and according to past practice unless there is any special reason not to adhere to such practice. The doctrine of “legitimate expectation” has been Judicial recognised by this court in a number of decisions. The doctrine of “legitimate expectation” operates in the domain of public law and in an appropriate case, constltues a substantive and enforceable right.”
17. Furthermore, a concluded contract having been entered in to by and between the parties, the writ petitioner/respondent, if aggrieved thereby, ought to have filed a write application at that point of time. He did not do so. The deed of lease, therefore, remained operative for period of 3 years. It is also not in dispute as would appear from the averments made in the writ application itself that the May or-in-Council renewed the lease for a period of 3 years, although the appellant did not file any application there for prior to 3 months before the expiry of the period of lease. The question as to whether the deed of lease would be renewed or not, is a matter between the lessor and the lessee. The writ petitioner respondent had no locus stand! to question the same, nor in fact had raised any contention in that regard in the writ application. It is also profitable to note that in the affidavit in opposition, the respondents, inter alia, alleged that the writ petitioner/ respondent had knowledge about the contents of the said agreement. The said statement made in paragraph 8 of the affidavit in opposition had been traversed in paragraph 7 of the affidavit in reply, but the said allegation had not been donied at all. If the writ petitioner/respondent had knowledge to the effect that such an agreement had been entered into by and between the appellant and Chandernagore Municipal Corporation, which contained a term relating to renewal of the period of lease, the writ petitioner must be held to be estopped and precluded from questioning the said clause. In paragraph 1501 of Halsbury’s Lams of England, 4th Edn. Volume 16. It is stated :
There is said to be an estoppel where a party is not allowed to say that a certain statement of fact is untrue, whether in reality it is true or not. Estoppel, or “conclusion” as it was frequently called by the older authorities, may therefore be defined as a disability whereby a party is
precluded from alleging or proving in legal proceedings that a fact is otherwise than it has been made to appeal by the matter giving rise to that disability. Estoppel is often described as a rule of evidence, but the whole concept is more correctly viewed as a substantive rule of law.”
18. It is also profitable to note that the learned author at paragraph 1609 states the following legal principle :
“The question whether a course of conduct, negligent or otherwise, amounts to a representation, or is such as a reasonable man would take to be a representation meant to be acted on in a certain way, must vary with each particular case. With certain exceptions no general rules can be laid down for answering it. The acceptance of money paid in consideration of the existence of a certain state of things of ten estops the receiver, in the absence of some cause unknown to him entitling him to terminate it, from denying the existence of that state of things, and affords conclusive evidence of a waiver of any objection to the contract or other matter in respect of which it is paid. Thus the acceptance of premiums with knowledge of circumstances entitling the insurer to avoid the policy estops him from averring that for that reason it is not a valid policy.
The acceptance of money is, however, by no means the only conduct which may be relied on as conclusive evidence of waiver of an Irregularity or other ground of objection to a case set up. Thus a man who, adlng as director of a company, takes part in conflrmlnt the allotment of shares to himself, cannot, in an action for calls, be heard to say that his appointment as director or the allotment of shares was Irregular and ultra vires.
A trustee in bankruptcy who has allowed the bankrupt to go on trading in his own name may be estopped as against execution creditors from claiming his property. Parties to litigation who have continued the proceedings with knowledge of an irregularity of which they might have availed themselves are estopped from afterwards setting it up: and, a fortiori, on a somewhat different principle, such a party cannot take advantage of an error to which he has himself contributed. Where, however, an objection to the jurisdiction of an inferior court appears on the face of the proceedings a party who consented to the exercise of the jurisdiction is not thereby estopped from afterwards raising the objection, since the jurisdiction of a court of limited Jurisdiction cannot be enlarged by estoppel.”
19. In the aforementioned backdrop, the Judgment of the learned trial Judge will have to be taken into consideration. The learned trial Judge, as has rightly been pointed out by Mr. Banerjee, has proceeded on a wrong promise that no document had been produced either by the municipal corporation or the appellant showing that at the time of auction such clause for renewal was also stipulated. In fact, the writ petitioner who intended to obtain a writ of or in the nature of Mandamus, was duty bound to produce the same, and the onus in respect thereof, was not upon the appellant. The learned trial Judge, in our opinion, further went wrong in holding that as the grant for lease was for a period of 3 years only. In the subsequent
agreement on clause of renewal for another term could be incorporated. As indicated hereinbefore, the same being not the subject matter of the writ application, and in fact no averment in that regard having been made in the writ application, it was not permissible for this court to enter into the aforementioned question. My learned brother has held that clause 31 of the agreement specifically provides for renewal dues. Clauses 31 and 32 referred to by my learned brother, if read together, leave no manner of doubt whatsoever, that a provision had been made out for grant of renewal subject to the conditions mentioned therein. For the reasons staled hereinbefore, it is also difficult for us to accept the finding of the learned trial Judge to the effect that only because there exists a controversy as to when the appellant filed an application for renewal, the same should be disbelieved.
20. For the aforementioned reasons, I, in agreement with the judgment Just now pronounced by my learned brother, hold that the Judgment under appeal cannot be sustained and is liable to be set aside accordingly.
21. Appeal allowed