Gwalior Dairy Ltd. vs State Of M.P.

NEUTRAL CITATION NO. 2026:MPHC-GWL:19910
1 WP-1466-2007
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR

BEFORE
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
th
ON THE 8 OF JULY, 2026
WRIT PETITION No. 1466 of 2007
GWALIOR DAIRY LTD.
Versus
STATE OF M.P. AND OTHERS
Appearance:
Shri N.K. Gupta - Senior Advocate alongwith Shri Y.P.S. Rathore -
Advocate for the petitioner.
Shri Dharmenda Nayak - GA for the respondents/State.
Shri Aditya Sharma - Advocate for the respondent No.5/Corporation.
ORDER
The instant petition under Article 226 of the Constitution of India is
preferred by the petitioner seeking following reliefs:-
"It is therefore humbly prayed that this Writ Petition may kindly be allowed and a writ in the
nature of
certiorari, mandamus or any other suitable writ or order or directions be issued and the
respondents may kindly be directed to finalise the claim of the petitioner regarding compensation
before taking possession of the constructed area of survey numbers mentioned in para 5.5 of the
petition and make payment accordingly and till then the respondents may kindly be restrained
from taking possession of the constructed area in the interest of justice."
2. Learned Senior Counsel for the petitioner has submitted before this
Court that on 01.07.1942 and 01.05.1943, the petitioner/Company took on
lease land admeasuring 391.5 acres and 104 acres, respectively, situated at
Gwalior Sewage Farm. The lease deeds in that regard were duly executed.
As per Clause 5 of the said lease deeds, the lessee was required to deliver
possession of the leased land to the lessor upon expiration of the lease. Any
crop left unreaped within the leased area at the time of such expiration was
Signature Not Verified
Signed by: NEETU
SHASHANK
Signing time: 7/10/2026
11:11:02 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:19910
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agreed to become the property of the lessor. Similarly, any structure built by

the lessee was agreed to become the property of the lessor upon payment of
reasonable compensation.
3. Learned counsel further submitted that after the expiration of the
lease period, i.e., after 25 years, possession of the structures constructed over
the leased land was handed over to the Tehsildar on 06.05.1991. He further
submitted that since lease rent at the prevailing rate was demanded from the
petitioner, the petitioner preferred Civil Suit No.111A/2009 challenging the
same, which was dismissed vide judgment and decree dated 21.02.2011.
Against the said judgment, the petitioner preferred First Appeal No.6A/2011,
which came to be allowed vide judgment and decree dated 07.05.2012,
wherein it was held that the respondents were entitled to realise the rent only
at the rate agreed upon in the lease deeds. Thus, so far as the issue relating to
lease rent was concerned, it stood settled. However, with regard to the
reasonable compensation as provided under Clause 5 of the lease deeds, the
same was never determined. A request in this regard was made by serving a
notice dated 19.01.2007, but since no action was taken and no compensation
was paid to the petitioner, the present petition came to be filed seeking the
aforesaid reliefs.
4. Learned counsel submitted that admittedly, as per Clause 5 of the
lease deeds, the respondents were liable to pay reasonable compensation for
the structures constructed by the petitioner/Company during the tenure of the
lease. However, till date, the said compensation has not been paid. Therefore,
a writ of mandamus deserves to be issued directing the respondents to pay
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Signed by: NEETU
SHASHANK
Signing time: 7/10/2026
11:11:02 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:19910
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reasonable compensation in terms of the aforesaid clause of the lease deeds.

5. On the other hand, learned counsel for the respondents/State as well
as learned counsel for the Corporation submitted that the claim raised by the
petitioner is highly belated and, therefore, issuance of any direction at this
stage would amount to granting relief to a party that has slept over its rights
for several years. It was, therefore, prayed that the present petition be
dismissed.
6. After hearing learned counsel for the parties and perusing the
record, this Court finds that although the petitioner raised its claim for
compensation in the year 2007 under Clause 5 of the lease agreements dated
01.07.1942 and 01.05.1943, which had expired in the years 1967 and 1968,
respectively, and possession thereof was handed over on 06.05.1991,
allegedly taken by the Tehsildar on 06.09.1994, the fact remains that Clause
5 of the lease agreements specifically provides for payment of reasonable
compensation in respect of the structures, which, upon being handed over to
the lessor, would become the property of the lessor if not removed by the
lessee. Since the compensation has not been paid to the petitioner, mere
expiration of the lease period would not extinguish the petitioner's right to
claim such compensation, and the same would constitute a recurring cause of
action. Thus, the contention regarding delay raised by learned counsel for the
respondents has no force.
7. Admittedly, the reasonable compensation contemplated under
Clause 5 of the lease deeds has neither been quantified nor calculated and
paid to the present petitioner. This Court cannot undertake the exercise of
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Signed by: NEETU
SHASHANK
Signing time: 7/10/2026
11:11:02 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:19910
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quantification; rather, it can only direct the State authorities to quantify the

compensation payable under Clause 5 of the lease agreements and disburse
the same to the petitioner as expeditiously as possible.
8. This direction is being issued in view of the fact that the existence
and validity of the lease agreements have not been denied by the
respondents. Thus, when the petitioner's right to receive reasonable
compensation for the structures standing on the leased property accrued upon
handing over possession of the property to the State, and it is stated that
various Government departments are presently functioning from the said
premises, the aforesaid direction deserves to be issued.
9. Accordingly, the petitioner is directed to submit a fresh
representation before the concerned authority within a period of 15 days
from today. Upon receipt of such representation, the concerned authority
shall consider and decide the same in accordance with law within a further
period of 90 days.
10. With the aforesaid directions, the present petition is hereby
disposed of.
(MILIND RAMESH PHADKE)
JUDGE
neetu

Signature Not Verified
Signed by: NEETU
SHASHANK
Signing time: 7/10/2026
11:11:02 AM