Rajnish Kumar And Another vs. State Of Punjab And Anr

Facts

The petitioners, owners of land measuring 8 kanals 2 marlas, leased it to the State of Punjab for 21 years via a registered lease deed dated 15.12.2014, for setting up a computerized inter-state check post. The lease amount was stipulated at Rs. 75,000/- per kanal annually. The petitioners claim possession was taken and reflected in revenue records. The State, however, cancelled the lease deed via a communication dated 28.12.2020, citing the cancellation of the Information Collection Center/Barrier due to the Central Goods and Services Tax Act, 2017, and informed the petitioners they were free to use their land. The petitioners sought release of lease amounts with interest from the lease execution date.

Held

The Court held that the State is liable to pay the lease money as per the lease agreement dated 15.12.2014 for the period commencing from the execution of the lease deed until the communication dated 28.12.2020. The reasoning was that although the State communicated the cancellation of the lease deed on 28.12.2020, they did not dispute that the revenue records continued to reflect their possession. The Court found that the petitioners could not claim lease money after the communication of cancellation, but were entitled to it for the period they were unaware of the cancellation and the land was in the State's possession. For any period subsequent to 28.12.2020, any dispute would be a question of fact for arbitration. The Court directed the release of the lease amount for the period 15.12.2014 to 28.12.2020 within three months, failing which interest at 6% per annum would be payable. The period the petition remained pending would be considered for limitation if arbitration was invoked.

Key Issues

1. Whether the petitioners are entitled to lease amount for the period from 15.12.2014 until the cancellation of the lease deed, considering the State's contention that the agreement was for a check post that was subsequently cancelled due to the GST Act, 2017? Petitioner's Argument: The petitioners argued that a registered lease deed was executed, possession was taken and reflected in revenue records, and the land has not been returned, entitling them to the lease amount as per the agreement. Respondent's Argument: The State argued that the purpose of the lease (computerized inter-state check post) was rendered obsolete by the GST Act, 2017, leading to the cancellation of the lease deed. They contended that no liabilities are due and that any dispute is a matter for arbitration, as an alternative remedy.