State action in land leases must meet Article 14 test, says Calcutta High Court

Kolkata: The Calcutta High Court has held that even in matters arising out of contractual obligations, the conduct of a public authority must satisfy the test of Article 14 of the Constitution, but in this case, the Kolkata Metropolitan Development Authority (KMDA) acted within its rights in issuing a show-cause notice for resumption of land.

A Division Bench of Justice Debangsu Basak and Justice Md. Shabbar Rashidi delivered the verdict while dismissing an appeal by a lessee who had been allotted a Higher Income Group (HIG) plot at Baishnabghata Patuli Township in 1989. The plot was allotted through a lottery system under a housing project of the then Calcutta Metropolitan Development Authority, now KMDA. As per the lease deed, the allottee was required to construct a residential building within five years or within such further time as the authority might allow in writing on sufficient grounds. Physical possession of the land was handed over in 1990, but no construction was raised even after more than three decades.

The lessee sought extension of time, citing personal and infrastructural difficulties, but KMDA rejected his representations in January 2024. In June 2024, the authority issued a notice asking why the lease should not be cancelled and the land resumed.

The lessee challenged both orders, but his writ petitions were dismissed by a Single Judge earlier this year.

Upholding the dismissal, the Division Bench observed that public land allotted for housing must be utilised for the purpose for which it was granted. The court noted that the appellant had not even built a boundary wall to protect the property and had failed to substantiate his excuses with documents.

The judges held that while State actions in contractual matters must be judged against the principles of reasonableness and non-arbitrariness under Article 14, the KMDA’s move could not be termed arbitrary. The authority, they said, acted strictly in accordance with the covenants of the lease deed.

The court further underlined that in the public interest, if an individual is unable to fulfil the purpose of such an allotment, the land should be made available to someone who can.