Inaction Not Mere Lethargy But 'Culpable Refusal' To Act Resulting In Actionable Wrong: Telangana HC Adjudges Contractual Dispute U/ Article 226

Directing the Indian Oil Corporation Ltd to vacate the premises of certain persons for continuing to occupy it despite expiry of the lease, the Telangana High Court pulled up the public sector undertaking for "quietly continuing to squat on the petitioners' land" without having any right is an overt act requiring the court's interference under Article 226.

In doing so the high court reiterated the court's power to interfere in a contractual dispute between a private individual and the State/Public Authority in a petition filed under Article 226 if it is infringing upon fundamental rights conferred under Article 14 of the Constitution.

Ruling in favour of the petitioners, Justice Moushumi Bhattacharya in her order said that if a public body fails to take appropriate action to prevent breach of these rights, then such an inaction on the State's part would warrant judicial review. The court further said:

“Inaction or the absence of overt action, so to speak, falls in a different category. Inaction is not lethargic lack of action per se but a culpable failure or refusal to act where the action would have led to an outcome of “Rightful” action, that is one which preserves the rights fundamental to the other party. Therefore, silence or not doing anything, is equivalent to doing something which robs another of his/her rights and makes the inaction actionable in a writ Court. Inaction on the part of a State body is generally lack of diligence, probity or action which is expected of a public authority in terms of reflecting its will to act in furtherance of the Fundamental Rights guaranteed to persons and citizens under the Constitution. If a public body fails to take appropriate action to prevent breach of these rights, the inaction would warrant judicial review”.

The high court said that the Supreme Court and the High Courts have arrived at a consensus that a writ petition is maintainable even where the relief claimed stems from the contractual sphere where the State/instrumentality of the State is a party. The complaining party (the petitioner) can invoke the jurisdiction of a High Court within the bounds of judicial review on the fairness doctrine, it added.

It said that the fact that the present dispute arises out of lease deeds executed between the petitioners and a public authority would not, by itself, oust the jurisdiction of the high Court finding the writ petition to be maintainable.

It thereafter said that most cases cited by the parties the State/Public Authority had done an overt act that compelled the aggrieved citizen to approach the court. But in the present case the high court noted that no overt act was done by the State.

"In the present case, the respondent, in fact, has done nothing; or in other words, stayed put on the disputed land and refused to budge therefrom despite expiry of the lease. The absence of overt acts on the part of the respondents cannot however be used as a defense to a charge of arbitrariness. Quietly continuing to squat on the petitioners' land without a right or a license would be equivalent to an act which is both overt and lacking in probity," it underscored.

Background

The dispute arose from an expired lease deed. The petitioners contended that they had leased two of his premises to Indian Oil Corporation Limited (IOCL) for a period of 20 years, which expired this year. By way of multiple notices, the petitioners informed IOCL about their unwillingness to extend the lease and requested IOCL to vacate the premises.

However, the respondent ignored the notices and continued to run petroleum outlets at the premises of the petitioners. This compelled the petitioners to approach the High Court in two writ petitions.

IOCL contended that the High Court cannot extend the writ jurisdiction to matters that arise out of contractual obligations and do not confer any constitutional or statutory right in the individuals.

The petitioners argued that the actions of IOCL in not vacating were infringing upon their fundamental rights promised under Article 14 and 21 of the Indian Constitution.

The high court further said, "Common sense dictates that a party, least of all a public body, cannot hold on to a right or a property which no longer exists. The continued occupation of the leasehold land is not only an act of defiance but also one which has the potential of causing monetary loss to the petitioners. The petitioners could well have leased the land to a third party but are unable to do so by reason of the continued occupation by the respondents".

It referred to Supreme Court's decision in National Company v. Territory Manager, Bharat Petroleum Corporation Limited, wherein the apex court considered a similar issue–whether a writ petition under Article 226 of the Constitution is maintainable for vacating the premises in question occupied by Oil Companies even after expiry of the lease period. The Supreme Court had held that the conduct of the respondent companies in continuing to be in occupation of the premises after expiry of lease was unbecoming of a statutory corporation which is a “State” within the meaning of Article 12 of the Constitution.

The high court thus said that respondents cannot have any conceivable reason for staying on in the said premises with or without using the same as a retail outlet.

"The fact that the respondents have discontinued using the land as a retail outlet does not clothe the occupation with legality," it added. Allowing the pleas the court directed IOCL to vacate the premises within four weeks from November 18.

Case title: Athota Sashi Mohan v/s IOCL and P.Vijayalakshmi and Anr. v/s IOCL

WP 25779 of 2024 and WP 18813 of 2024

Counsel for petitioner: Sr. Counsel Mayur Reddy representing K.V. Ramana, Sr. Counsel B. Adinarayana Rao representing M.K. Viswanath Naidu,

Counsel for respondents: Advocate Dominic Fernandes, SC for IOCL.

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