There Is No Vested Right Of Renewal Of Lease Of Shops In Defence Shopping Complexes-Supreme Court [Read Judgment]

Dismissing the plea of lessees holding shops seeking renewal of their leases, the Supreme Court held that there was no vested right of renewal. The shops were allotted on lease to ex-service men who got injured in combat and also to dependents of deceased defence personnel. When their leases were not renewed after a period of five years, they approached the Delhi High Court, which rejected their petitions.

Before the Supreme Court it was contended by them that the non-renewal was based on instructions in letter dated 04.09.2008, which had stated that the lease should not be renewed after five years. It was contended that there was an endorsement ‘DGL’ on the top of the letter, which meant ‘Draft Government Letter’. So the contention was that a draft letter was produced by the Union of India to deny the appellant’s relief, and that it amounted to nothing but fraud.

The Supreme Court however held that the petitioners were even otherwise not entitled to relief. Reference was made to Standard Operating Procedure of 2001, which had clearly stated that there renewal was subject to discretion, vide clause 17 thereof. Later, the Standard Operating Procedure of 2007 had stated clearly in clause 18 that lease will not be renewed after five years. The Court held that the fact that the leases used to be automatically renewed as a matter of course until the formulation of SOP of 2007 will not enure to the benefit of the appellants. So even it letter dated 04.09.2008 was ignored, the petitioner was not entitled to relief.

The Court also stated that the plea of legitimate expectation by the appellant was unfounded.  The Court also found that the policy of granting leases for a specified period was not arbitrary.  The Court accepted the justification of the Union that this has been done to ensure that immediately on suffering a loss, ex-servicemen or their family members are rehabilitated for a certain period of time and after they have been rehabilitated and earned for 5 years they can earn their own livelihood without any support from the Army and other persons, who had suffered during this period, can be given this benefit.