State Cannot Dispossess Tenant On The Very Day A Writ Petition Is Filed Against It: Calcutta High Court Finds Legal Malice, Restores Industrial Plot

"Due process of law was paid mere lip-service — the element of fairness must be read into due process for the said term to have any meaningful application", Calcutta High Court dismissed appeals filed by the West Bengal Small Industries Development Corporation Limited (WBSIDCL), affirming a Single Judge order directing restoration of possession of industrial plots to a defaulting tenant and extension of a special conversion scheme in its favour.

A Division Bench of Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya found that the Corporation's conduct reeked of legal malice — having physically dispossessed the respondent on the very day a writ petition was filed against it, after being served a copy and informed the matter would be heard at 2:00 PM. The Court further held that the respondent qualified as an "existing allottee" under the Corporation's Special Scheme despite the expiry of its lease, and that denying it scheme benefits while extending identical benefits to a similarly situated entity violated Article 14 of the Constitution.

The Court framed four distinct issues: whether the respondent was entitled to renewal of tenancy under the 1976 Act; whether it qualified as an "existing allottee" under the WBSIDCL Special Scheme dated February 18, 2021; whether Article 14 was violated by denying the respondent benefits extended to M/s. Gravo Prints, a similarly situated entity; and whether legal malice vitiated the Corporation's actions.

No Statutory Renewal — Mandatory Prerequisites Not Met

On the question of renewal, the Court held firmly against the respondents. Section 3(2) of the 1976 Act and Rule 5 of the 1976 Rules require a formal application within the prescribed period accompanied by simultaneous deposit of all arrears of rent with interest — both conditions mandatory. The respondent had done neither. The Court rejected the argument that a letter dated May 5, 2014 requesting issuance of monthly rent bills constituted a renewal application. "In the said request, we do not find any whisper or intention to renew but merely the assertion that monthly rent bills ought to be issued." The Court also firmly rejected the respondent's plea to draw analogy with Sections 7 and 17 of the West Bengal Premises Tenancy Acts of 1997 and 1956. Government premises operate on an entirely different footing, the Court held — the 1976 Act is more rigorous than rent control laws precisely because of administrative exigencies and the public interest element. "The provisos to Section 3(2), which are subservient to the main provision, cannot be equated with the benefits given under Sections 7 and 17 of the 1997 and 1956 Acts."

"Existing Allottee" — Deliberate Choice of Words Saves the Respondent

On the Scheme, the Court reached the opposite conclusion in the respondent's favour. The Special Scheme of February 18, 2021 extended benefits of conversion from short-term to long-term lease to "existing allottees" — not "existing lessees." The Court held this deliberate distinction was determinative. The Scheme's language consciously excluded any requirement of a subsisting lease; it embraced all allottees in occupation of the estate, regardless of whether a valid lease was still in force. The respondent, continuing in occupation of the industrial plot as an allottee carrying on entrepreneurial activity, squarely fell within this expression. "There is a marked difference between 'existing allottees' and 'existing lessee' — whereas the former expression has been used in the Scheme, the latter has been deliberately avoided, thereby expressing the clear intention of the Scheme to make its benefits available to all allottees who were in possession of the subject-plots."

Conditions of Payment and Withdrawal of Litigation Are Not Pre-Conditions to Application

The Corporation argued that pending litigation and non-deposit of arrears disentitled the respondent from the Scheme's benefits. The Court rejected this, holding that these conditions operate after an application is considered and sanctioned in principle — not before. To require withdrawal of litigation as a pre-condition before any decision is taken would leave the applicant entirely remediless if the application were ultimately refused. "Such a situation cannot be contemplated under a beneficial Scheme." The Court also noted that WBSIDCL's own conduct reinforced this interpretation — in the case of M/s. Gravo Prints, it had accepted post-application deposits and permitted withdrawal of litigation after the scheme benefit was sanctioned.

Article 14 Violated — Parity with M/s. Gravo Prints Mandated

The Court found the Article 14 violation straightforward. M/s. Gravo Prints had its lease expire long before the Scheme, was also a defaulter, was permitted to deposit arrears after application, and was treated as an "existing allottee" — precisely the same footing as the respondent. Yet the respondent's application was not even considered. The Court reaffirmed the settled principle that once a State Scheme grants a privilege to one entity, all entities standing on similar footing acquire a right to similar treatment. "Once such privilege is granted to an entity, all other entities standing on similar footing automatically acquire a right to get similar treatment from the State — State action, even in contractual matters, must stand on a much higher pedestal and cannot be manifestly discriminatory or arbitrary."

Legal Malice — Dispossession on the Day of Filing Condemns the Corporation

The Court's most stinging findings were reserved for the legal malice issue. Applying the test laid down by the Supreme Court in State of A.P. v. Goverdhanlal Pitti — that legal malice is an act done wrongfully and wilfully without reasonable or probable cause, taken with an oblique or indirect object — the Court identified two distinct acts of malice. First, immediately after the earlier writ petition was dismissed for default on June 21, 2023, the Corporation passed a fresh resumption order in hot haste before the respondent could seek restoration — exploiting the vacating of the restraint order. Second, and more gravely, having been served with WPA 22402 of 2023 on September 14, 2023, and having been informed the matter would be taken up at 2:00 PM, the Corporation proceeded to take physical possession in the morning — a manifest attempt to present the court with a fait accompli. "The above modus operandi of the appellant-authorities reeks of palpable legal malice — the element of 'fairness' must be read into 'due process' for the said term to have any meaningful application within the Constitutional Scheme of India, and the two cannot exist without each other."

Date of Decision: March 19, 2026