Reasonable compensation for Lessee's structures under lease terms constitutes a recurring cause of action.

The petitioner company entered into lease agreements on July 1, 1942, and May 1, 1943, for land measuring 391.5 and 104 acres at Gwalior Sewage Farm. Clause 5 of the lease deeds stipulated that upon expiration, any structures built by the lessee would become the property of the lessor subject to the payment of "reasonable compensation".

The lease expired after 25 years, and possession of the structures was eventually handed over to the Tehsildar in May 1991. While previous litigation (FA No. 6A/2011) settled disputes regarding lease rent, the compensation for structures remained unpaid despite a formal notice sent by the petitioner in January 2007.

The petitioner approached the High Court seeking a writ of mandamus to finalize and pay the compensation.

1. Whether the petitioner is entitled to reasonable compensation for structures under Clause 5 of the lease deeds despite the expiration of the lease period and the passage of time.

2. Whether the petition is barred by delay and laches given that the lease expired in the 1960s and possession was taken in the 1990s.

The Court applied the principle of contractual obligation arising from lease deeds, specifically Clause 5 which mandates the payment of reasonable compensation for structures.

The court applied the doctrine of "recurring cause of action," holding that the non-payment of constitutionally/contractually recognized compensation constitutes a continuing wrong, preventing the right from being extinguished solely by the expiration of the lease.

The court also exercised its discretionary power under Article 226 of the Constitution of India to issue a writ of mandamus for the performance of a public/legal duty.

The Court rejected the respondents' argument that the claim was barred by delay. It reasoned that because the lease agreement specifically provided for compensation and the same had never been quantified or paid, the right to receive it did not expire with the lease term; rather, the failure to pay created a recurring cause of action.

The Court noted that the validity of the lease agreements was undisputed and that the State was currently utilizing the premises for various government departments. Since the Court cannot factually quantify compensation in a writ proceeding, it determined that the appropriate remedy was to direct the State authorities to perform their obligation under the contract to calculate and disburse the amount.

The Court directed the petitioner to submit a fresh representation to the concerned authority within 15 days. The respondent authorities were directed to consider, quantify, and decide the compensation claim in accordance with Clause 5 of the lease deeds within 90 days of receipt of the representation. The petition was disposed of with these directions.