An expired and cancelled lease confers no right to retain possession despite a pending mitigation or compounding application.

The petitioner claimed rights over Plot No. 53, Mahakal Road Awasiya Yojna, Ujjain, pursuant to a registered lease deed executed by the Ujjain Development Authority. The petitioner asserted that he had deposited advance lease rent and had subsequently obtained residential-cum-commercial building permission from the Municipal Corporation, Ujjain.

A show-cause notice was issued alleging violations of the lease conditions, including division of the plot and commercial use of property allotted for residential purposes. The petitioner submitted a reply and sought compounding/mitigation under the applicable 2018 Rules.

The Authority cancelled the lease in October 2023. The petitioner thereafter applied for renewal and instituted a civil suit challenging termination of the lease. Although the trial court initially granted temporary protection, the appellate court vacated the injunction, and the petitioner’s challenge to that order was unsuccessful.

Following a notice under Section 248 of the Madhya Pradesh Land Revenue Code, 1959 (“MPLRC”), the petitioner again sought compounding and renewal. By order dated 13 June 2025, the Authority directed him to vacate the property within seven days, without accepting his contention that the compounding application remained undecided.

Whether the Authority’s order directing the petitioner to vacate the property under Section 248 of the MPLRC was illegal, arbitrary, or violative of natural justice?

Whether the petitioner was entitled to have his application for compounding or mitigation considered under Rule 22(7) of the Madhya Pradesh Vikas Pradhikarano Ki Sampattiyo Ka Prabandhan Tatha Vyayan Niyam, 2018, before re-entry or eviction?

Whether the petitioner could claim a continuing right to remain in possession after expiry and cancellation of the 30-year lease, merely because he had paid lease rent or was willing to pay compounding charges?

The Court applied Article 226 of the Constitution, under which interference is warranted only where the impugned action is unlawful, arbitrary, perverse, or procedurally improper.

Section 248 of the MPLRC authorises the competent authority, including the duly empowered Chief Executive Officer of the Development Authority, to remove unauthorised occupants from public or Authority property.

Rule 22(7) of the 2018 Rules permits a leaseholder, after cancellation but before re-entry, to apply in writing for mitigation of lease violations; the authority must assess the violations, current property valuation, changed land use, and mitigation amount before placing the matter before the Chief Executive Officer.

However, the provision does not create an automatic right to renewal, compounding, or continued possession after expiry and cancellation of the lease.

The Court relied on decisions holding that an expired or cancelled lease does not confer a right to remain in possession and that payment of rent does not automatically renew the lease.

It also considered Bishandas v. State of Punjab, AIR 1961 SC 1570, cited by the petitioner, and decisions concerning the limited protection available against forcible dispossession where lawful statutory procedure is followed.

The Court found that the lease was for 30 years and had expired in 2016, and that there was no material showing any subsequent renewal or extension.

The Authority had issued a show-cause notice, received the petitioner’s reply, considered the alleged violations, and passed a reasoned order. The alleged breaches included division of the plot and use of premises allotted for residential purposes for commercial activity.

Consequently, the Court held that the requirement of procedural fairness had been met and that the petitioner could not claim a continuing leasehold right merely on the basis of advance rent payment or willingness to pay compounding charges.

Although Rule 22(7) contemplates mitigation before re-entry, the Court treated it as a regulatory mechanism subject to satisfaction of the prescribed conditions, not as an automatic entitlement overriding the expiry and cancellation of the lease.

The Court distinguished the decision in Naushad Choudhary, where the application for mitigation was pending and the authority was directed to decide it, because in the present case the Authority had already considered the petitioner’s objections and passed a detailed order.

Since the petitioner’s possession had become unauthorised after expiry and cancellation of the lease, and the Authority had proceeded under the statutory mechanism rather than by forcible dispossession, no ground for interference under Article 226 was established.

The Authority had followed due process, considered the petitioner’s objections, and was competent to direct removal under Section 248 of the MPLRC.

The petitioner’s request for compounding or mitigation did not, by itself, invalidate the eviction order or confer an automatic right to renewal or continued possession.

Finding no arbitrariness, perversity, impropriety, or jurisdictional error, the Court dismissed the writ petition and declined to interfere with the order dated 13 June 2025.