REPORTABLE  IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.      5883          OF 2010 (Arising out of S.L.P. (C) No. 35732 of 2009)

State of Madhya Pradesh.              .... Appellant (s)

Versus

Nerbudda Valley Refrigerated  Products Company Pvt. Ltd & Ors.       .... Respondent(s)

WITH

CIVIL APPEAL NO.   5884            OF 2010     (Arising out of S.L.P.(Civil) No. 35734 of 2009)

J U D G M E N T  

P. Sathasivam, J.

1)  Delay  condoned  in  S.L.P.(C)  No.  35734  of  2009.  

Leave granted in both the special leave petitions.

2)  Being aggrieved by the final order dated 26.09.2008  

passed by the High Court of Madhya Pradesh at Jabalpur  

in Writ Petition No. 5469 of 2008 setting aside the order  

dated 15.04.2008 passed by the Nazul Officer rejecting the  

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application  moved  by  the  Respondent-Nerbudda  Valley  

Refrigerated  Products  Company  Pvt.  Ltd.  (hereinafter  

referred to as “the Company”) for the grant of No Objection  

Certificate (NOC) to raise constructions on the leased land  

after  changing  the  land use  from industrial  purpose  to  

commercial  purpose,  the  State  of  Madhya  Pradesh  has  

filed  appeal  arising  out  of  S.L.P.(C)  No.  35734 of  2009.  

Pursuant to the order of the High Court, the respondent-

Company alleging that though the Nazul Officer passed an  

order, has not granted NOC and disposed of the same not  

in accordance with the Circular of the State Government,  

filed a Contempt Petition (C) 173 of 2009 before the High  

Court.  By order dated 13.10.2009, the High Court after  

finding that the Nazul Officer has dealt  with the matter  

beyond  the  Circular  dated  14.02.1966  of  the  State  

Government  and  not  followed  its  earlier  order,  directed  

him to personally present before the Court on 27.10.2009  

to  explain  his  “misconduct”  in  passing  such  order.  

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Questioning the said order, the State of Madhya Pradesh  

has  also  filed  SLP (C)  35732 of  2009.   Since  both  the  

orders of the High Court relate to the same issue, these  

appeals are being disposed of by this judgment.

3)  Heard Mr. Ravindra Shrivastav, learned senior counsel  

for the appellant and Mr. S. Gopakumaran Nair, learned  

senior counsel for the respondent.

4)   The  issues  which  arise  for  consideration  in  these  

appeals are:-

(i)   Whether the High Court has exceeded its jurisdiction  

under Article 226 of the Constitution of India while setting  

aside  the  order  dated  15.04.2008  passed  by  the  Nazul  

Officer  in a writ  petition when an alternative  remedy is  

available to respondent no. 1 to challenge the said order  

before the Collector as per Section 18 of the Revenue Book  

Circular?

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(ii) Whether the High Court is justified in directing the  

Nazul  Officer  to  present  personally  to  explain  his  

“misconduct”?

5)  Before considering the above issues, it is useful to refer  

certain factual details which necessitated the Nazul Officer  

to pass an order declining to grant NOC.  The State of  

Madhya Pradesh as early as on 14.03.1939 executed the  

lease  of  12  acres  of  land  in  favour  of  the  respondent-  

Company  for  a  term  of  30  years  from  14.03.1939  to  

13.03.1969  for  the  purpose  of  developing  trade  in  

refrigerated food stuffs and industries at the ground rent  

of Rs. 1/- per acre per annum for the first 30 years of the  

lease.   The  Government  of  Madhya  Pradesh,  vide  

notification dated 14.02.1966, instructed the Nazul Officer  

to examine the question of ownership of the land as per  

rules and regulations so that the Government land could  

not  be  encroached  at  the  time  of  construction  of  the  

building.  This notification empowers the Nazul Officer to  

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examine the question of ownership of the land on which  

the construction has to be raised.  As Respondent No. 1  

has  violated  the  terms and conditions  of  the  lease  and  

exceeded the scope and purpose of the lease by raising  

constructions on the leased land without prior approval or  

permission  of  the  State  Government,  the  Additional  

Collector,  Bhopal,  on  03.05.1982,  issued  a  show cause  

notice  asking  the  respondent  to  explain  as  to  why  the  

lease not to be determined.  In view of the dispute between  

the parties, the issue was referred to Arbitration as per  

clause 12 of the lease deed dated 14.03.1939 for amicable  

settlement.   The  Arbitrator,  by  his  award  dated  

03.07.1985, held that there is no prohibition in the lease  

deed that respondent No. 1 would not raise constructions  

to develop industry, trade and commerce.  The said award  

was challenged by the appellant-State in Misc. Appeal No.  

166 of 1988 before the High Court of Madhya Pradesh and  

the High Court upheld the award passed by the Arbitrator  

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on 03.07.1985.  Pursuant to the said order of the High  

Court, the appellant-State renewed the lease deed for 3.82  

acres of land for a period of 30 years commencing from  

1969  to  1999  in  favour  of  the  respondent.   The  

Government  of  Madhya  Pradesh,  vide  its  letter  dated  

04.05.1999, permitted the respondent-Company to change  

the  use  of  leased  land  from  industrial  purpose  to  

commercial  or  residential  purpose  on  payment  of  lease  

rent,  as  payable  on  the  land  used  or  changed  for  

commercial or residential purpose, as per the commercial  

rate assessed according to the rules and regulations and  

also directed the Collector, District Bhopal, to recover the  

said rent as per the rules and regulations.

6)     The appellant-State again renewed the lease deed for  

3.13  acres  of  land  for  30  years  from  14.03.1999  to  

13.03.2029 in favour of the respondent-Company.  Vide  

letter dated 16.01.2004, the appellant-State permitted the  

respondent-Company  to  change  the  use  of  leased  land  

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from  industrial  purpose  to  commercial  and  residential  

purpose on payment of lease rent as assessed as per the  

rules  and  regulations.   The  Joint  Director,  Town  &  

Country Planning, Bhopal sanctioned the plan for 3 years  

for  residential,  commercial  development  on  the  leased  

land presented  by the  respondent.   The Government  of  

Madhya Pradesh, vide its letter dated 19.01.2007, directed  

the Collector, Bhopal that where the use of leased land is  

changed, then the rent on such leased land shall be re-

assessed  as  per  the  rules  and  regulations.   On  

06.03.2007,  the  respondent-Company  made  an  

application  for  grant  of  NOC  before  the  Nazul  Officer,  

Bhopal,  for  raising  commercial  and  residential  

constructions on the leased land without paying the lease  

rent  of  Rs.  30,41,10,240/-  assessed  as  per  rules  and  

regulations  on  the  change  of  use  of  leased  land  to  

commercial and residential purpose.   

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7)  The respondent filed a Writ Petition No. 15400 of 2007  

before  the  High  Court  of  Madhya  Pradesh  praying  for  

issuance of Writ of Mandamus directing the Nazul Officer  

to decide the application for grant of NOC pending before  

him.  On 25.02.2008, the Tehsildar issued advertisement  

in the newspapers inviting objections against granting of  

NOC  to  the  respondent-Company  for  change  of  use  of  

leased land.  One Aziz Udeen, Partner M/s Chandan Mal  

Looks & Co. had registered his objection against granting  

NOC to the respondent-Company on the ground that there  

is  a  dispute  between  the  respondent  and  his  company  

regarding  the  land for  which  the  respondent  is  seeking  

NOC and Civil  Suit No. 503 of 2006 is already pending  

before the Civil Judge.   

8)  By order dated 20.03.2008, in Writ Petition No. 15400  

of  2007,  the  High  Court  directed  the  Nazul  

Officer/Appropriate  Authority  to  take  a  decision  on  the  

application of the respondent-Company for grant of NOC.  

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In compliance of the said order, the Nazul Officer, Bhopal,  

asked for certain documents and sought information from  

the respondent-Company to decide the application.  The  

respondent-Company  failed  to  submit  those  documents  

and  information  sought  for  despite  several  reminders.  

After hearing the parties, the Nazul Officer, by order dated  

15.04.2008,  rejected  the  application  for  grant  of  NOC.  

Aggrieved by the said order, the first respondent preferred  

Writ Petition No. 5467 of 2008 before the High Court of  

Madhya Pradesh.  In the said writ petition, the State had  

taken the preliminary objection that the writ  petition is  

not maintainable as alternative remedy was available to  

the  respondent  under  Section  18  of  the  Revenue  Book  

Circular.   In spite of  the said objection,  by order dated  

26.09.2008,  the  High  Court  directed  the  respondent-

Company  to  submit  the  documents  and  information  

sought for by the Nazul Officer and also directed the Nazul  

Officer  to  decide  the  application  of  the  respondent  for  

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grant of  NOC by passing a speaking order.  In the same  

order,  the  High  Court  directed  the  Nazul  Officer  to  

consider  only  the  circular  dated  14.02.1966  and  the  

Arbitration Award while deciding the application for NOC.  

Again,  the  Nazul  Officer  asked  certain  documents  and  

sought for information from the respondent-Company and  

after hearing the respondent the Nazul Officer, by order  

dated  02.02.2009,  rejected  the  application  for  grant  of  

NOC. Questioning the said order, the respondent preferred  

Contempt  Petition  (C)  No.  173 of  2009 before  the  High  

Court.   The  High  Court,  on  13.10.2009,  while  issuing  

notice in the Contempt Petition, observed that the Nazul  

Officer is trying to frustrate and circumvent the directions  

issued  by  the  High  Court  directing  him  to  explain  his  

“misconduct”.   

9)   Mr.  Ravindra  Shrivastav,  learned  senior  counsel  

appearing for the State objected to the order of the High  

Court  by  pointing  out  that  under  Section  18  of  the  

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Revenue  Book  Circular,  against  the  order  of  the  Nazul  

Officer,  an  effective  remedy by  way  of  appeal  would  lie  

before the Collector.  According to him, when such remedy  

is available, the High Court is not justified in exercising its  

extraordinary  jurisdiction  under  Article  226.   He  also  

pointed out that even after the direction of the High Court,  

the Nazul Officer has passed an order only in accordance  

with law, hence, if the first respondent is aggrieved, it can  

be  challenged  in  the  manner  known  to  law  before  the  

Collector.  However, it filed a contempt petition and the  

High  Court  directed  personal  appearance  of  the  Nazul  

Officer to explain his “misconduct” for not passing orders  

as per the earlier order.  According to the learned senior  

counsel  for  the  State,  the  Nazul  Officer  has  passed  an  

order as per the provisions of the statute, circulars and  

Government  instructions.   On  the  other  hand  Mr.  S.  

Gopakumaran  Nair,  learned  senior  counsel  for  the  

respondent-Company  supported  the  order  of  the  High  

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Court and pleaded for dismissal of both the appeals.   

10)   We have carefully  considered the  rival  contentions  

and perused the relevant materials.

11)   Coming to  the  first  objection as  to  the  exercise  of  

jurisdiction by the High Court under Article 226 in respect  

of the order dated 15.04.2008 passed by the Nazul Officer,  

it  is  pointed out  that  an effective  remedy by way of  an  

appeal to the Collector is provided under Section 18 of the  

Revenue Book Circular which reads as under:-  

“Section 18-Sale and Disposal of Land

2.117. All land which is the property of Government should  ordinarily  be  sold  through  the  Director  of  Land  Records.  Agricultural  or  pastoral  land acquired for  public  purposes  should,  when it  is  no  longer  required  by  Government,  be  disposed of in accordance with the instructions in paragraph  3 of M.P. Revenue Book Circular 1-5.  

2.118.  If  any  Nazul land  in  charge  of  the  W.D.  is  to  be  relinquished, a reference should be made by the C.E. to the  Collector who will deal with the land under the Provisions of  the M.P. Revenue Book Circular IV-I, paragraph 29.  

2.119.  When  any  Government  land  or  other  immovable  public  property  is  made  over  to  a  local  body  for  public,  religious,  educational  or  any other  specified purposes,  the  grant  should  be  subject  to  the  following  conditions  in  addition to any other that may be prescribed:-  

(1)  that the  property  shall  be  liable  to  be  resumed  by  Government;  

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(a) if it is used for any purpose other than that specified; or  

(b)  in the case of   buildings, if they are allowed to fall into  disrepair;

(2)  that the  property  should  be  at  any  time  resumed  by  Government,  the  compensation  payable  shall  in  no  case  exceed-  

(a)  the amount paid to Government by the local body less  depreciation on buildings,  if any, calculated in accordance  with  Paragraph  3.036  of  Chapter  III-"Buildings"  for  the  period during which the property was in charge of the local  body or the present value of the property, whichever is less;  

(b)  the cost  or  present  value,  whichever  is  less,  of  any  buildings or other works constructed on the property by the  local body.”

12)  A perusal of the order of the Nazul Officer shows that  

grant of NOC depends upon various factors and fulfillment  

of certain conditions.  It  is also not in dispute that the  

said  officer  is  better  equipped  with  to  decide  the  

application for grant of NOC. Undoubtedly, while deciding  

such an application, Nazul Officer has to consider not only  

the circulars but also rules and regulations framed by the  

State  Government.   Even  otherwise,  when  the  ultimate  

order of Nazul Officer can be canvassed before Collector,  

the  High  Court  ought  not  to  have  exercised  its  

extraordinary jurisdiction under Art. 226 as an appellate  

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court  over  the  finding  of  fact  arrived  at  by  the  Nazul  

Officer.  In this context, it is useful to refer the following  

decisions:

In  Punjab National  Bank vs.  O.C.  Krishnan & Ors.,  

(2001) 6 SCC 569, this Court held:-

“6. The Act has been enacted with a view to provide a special  procedure  for  recovery  of  debts  due  to  the  banks  and  the  financial institutions. There is a hierarchy of appeal provided in  the Act, namely, filing of an appeal under Section 20 and this  fast-track procedure cannot be allowed to be derailed either by  taking recourse to proceedings under Articles 226 and 227 of  the  Constitution  or  by  filing  a  civil  suit,  which  is  expressly  barred. Even though a provision under an Act cannot expressly  oust the jurisdiction of the court under Articles 226 and 227 of  the  Constitution,  nevertheless,  when  there  is  an  alternative  remedy  available,  judicial  prudence  demands  that  the  Court  refrains  from  exercising  its  jurisdiction  under  the  said  constitutional provisions. This was a case where the High Court  should not have entertained the petition under Article 227 of  the Constitution and should have directed the respondent to  take recourse to the appeal mechanism provided by the Act.”

In  State of  Himachal  Pradesh and Ors.  vs.  Gujarat  

Ambuja Cement Ltd. and Anr.  (2005) 6 SCC 499, this  

Court observed as under:-

“17. We shall first deal with the plea regarding alternative  remedy as raised by the appellant-State. Except for a period  when Article  226 was amended by the Constitution (42nd  Amendment)  Act,  1976,  the  power  relating to  alternative  remedy  has  been  considered to  be  a  rule  of  self  imposed  limitation. It is essentially a rule of policy, convenience and  discretion and never a rule of law. Despite the existence of  an  alternative  remedy  it  is within  the  jurisdiction  of  discretion of the High Court to grant relief under Article 226  of the Constitution. At the same time, it cannot be lost sight  of that though the matter relating to an alternative remedy  

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has nothing to do with the jurisdiction of the case, normally  the  High  Court  should  not  interfere  if  there  is  an  adequate efficacious  alternative  remedy.  If  somebody  approaches  the  High  Court  without  availing  the  alternative remedy provided the  High Court  should ensure  that  he  has  made  out  a  strong  case  or  that  there  exist  good grounds to invoke the extraordinary jurisdiction.”

13)   There  is  broad  separation  of  powers  under  the  

Constitution between three organs of the State, i.e.,  the  

Legislature,  the Executive  and the Judiciary.   It  is  also  

well  established  principle  that  one  organ  of  the  State  

should  not  ordinarily  encroach  into  the  domain  of  

another.  Even if  the order of the first authority, in the  

case on hand, Nazul Officer, requires interference, it is for  

the appellate authority to look into it and take a decision  

one way or the other and it is not an extraordinary case  

which  warrants  direct  interference  by  the  High  Court  

under  Art.  226.   It  is  relevant  to  note  that  the  Nazul  

Officer  has  adverted  to  a  relevant  fact  that  the  

Government,  while  renewing  the  lease  of  3.13  acres  of  

land  from  14.03.1999  to  13.03.2029  in  favour  of  the  

respondent-Company,  permitted it  to  change the use of  

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leased  land  from  industrial  purpose  to  commercial  or  

residential  purpose  on  payment  of  the  lease  rent,  as  

payable on the land used or changed for commercial or  

residential  purpose.   In such circumstances,  if  the said  

direction is applicable, it is but proper on the part of the  

respondent to comply with it.   Even if  the stand of  the  

respondent-Company  is  acceptable  and  if  they  are  

aggrieved of the order of the Nazul Officer, they are free to  

challenge the same before the Collector as pointed above.  

In our opinion, interference by the High Court against the  

order of the original authority, which is based on factual  

details, is not warranted under writ jurisdiction.

14) Coming  to  the  second  submission,  in  view  of  our  

conclusion  about  the  order  of  the  High  Court  dated  

26.09.2008, we are satisfied that the second issue is to be  

answered against the respondent.  Here again, this Court,  

in a series of decisions, has held that when a matter is  

remitted to the original authority to decide the issue, the  

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said authority must be allowed to take a decision one way  

or the other in accordance with the statutory provisions,  

rules  and  regulations  applicable  to  the  same.   There  

cannot   be any restriction to pass an order in such a way  

de  hors to  the  statutory  provisions  or  

regulations/instructions  applicable  to  the  case  in  

particular.   As  pointed  out  earlier,  even if  there  is  any  

error, it is for the Collector/Government to set it right and  

the  High  Court  is  not  justified  in  asking  the  officer  to  

personally present and explain his “misconduct”.   In our  

considered  view,  the  High  Court  has  exceeded  its  

jurisdiction in issuing such a direction.

15) In the light of the above discussion, we set aside the  

impugned  order  of  the  High  Court  dated  26.09.2008  

passed in Writ Petition No. 5469 of 2008 and the order  

dated 13.10.2009 in Contempt Petition No. 173 of 2009.  

We make it clear that if the matter is still pending with the  

Nazul Officer, he is at liberty to pass appropriate orders in  

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accordance with the earlier directions of the High Court as  

well  as  the  rules  and  regulations,  instructions  and  

circulars issued by the Government which are applicable  

to  the  matter  in  issue  uninfluenced  by  any  of  the  

observations made by the High Court.  It is further made  

clear that if the Nazul Officer has already concluded and  

passed an order and the respondent-company is aggrieved  

of the same, it is free to avail the remedy under Section 18  

of the Revenue Book Circular and in that event it is for the  

Collector to consider and pass orders in accordance with  

law.   

16) With  the  above  directions,  both  the  appeals  are  

allowed.  No order as to costs.   

...…………………………………J.                   (P. SATHASIVAM)                                   

...…………………………………J.           (ANIL R. DAVE)  

NEW DELHI; JULY 23, 2010.          

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