The Calcutta High Court has held that rights lawfully accrued property rights under a previous government policy cannot be nullified by later executive orders with retrospective effect, especially when such orders impair vested leasehold or property interests.
The bench of Justice Partha Sarathi Sen, while setting aside a mutation denial order issued in 2014, emphasized that once a leasehold interest is transferred lawfully during a period when restrictive conditions stood withdrawn, such transfers remain valid and enforceable regardless of subsequent changes in government policy.
The Court found that a 1971 government notification had expressly removed key restrictions on leasehold property transfers. These relaxations remained valid until 1986, when the restrictions were reimposed by executive memo. Transfers made during this 15-year interregnum accrued legitimate rights, which cannot be undone retroactively.
Quoting Supreme Court precedents, the Court reaffirmed the principle that a citizen’s vested or accrued rights cannot be taken away by retrospective administrative decisions, unless the statute explicitly provides for such retrospective application.
“A valuable right, once accrued under a valid government notification, cannot be impaired by subsequent policy change—especially when such change is not expressly retrospective,” the judgment reads.
Detailed Background: 50 Years of Transfers and Policy Flip-Flops
The case revolves around a lease granted in 1969 by the Government of West Bengal for a residential property in Salt Lake (Bidhannagar). The original lease deed imposed multiple restrictive clauses: prohibiting transfer without government approval, disallowing partition among multiple heirs, and banning mortgage without prior consent.
However, in a crucial policy shift, the Government issued a memo on November 25, 1971, deleting these three restrictive clauses across lease deeds executed before that date. This liberalized regime allowed leaseholders to transfer or gift their interest without prior government permission.
Relying on this relaxation the original lessee, Monoronjon Bhowmick, settled the property in 1970 in favour of his brother Sudhir Ranjan Bhowmick. Mutation was duly effected in Sudhir’s name in 1974. In 2001, Sudhir executed a gift deed in favour of his son Sanjoy Bhowmick, and mutation again followed without objection. In 2009, Sanjoy executed a registered deed of assignment in favour of the present petitioners, who subsequently applied for mutation.
But things took a turn in 1986, when the State Government withdrew the earlier relaxation through a new memo, reimposing the three original restrictions on all lease deeds executed on or before 1971.
Years later, in 2014, the municipal authority rejected the petitioners’ mutation application on the ground that the 2009 transfer had been made without prior government approval — now again required under the 1986 memo. It also invoked a 2012 policy notification, which imposed new conditions on leasehold transfers.
The petitioners challenged this order, arguing that their rights stemmed from a valid, restriction-free transfer chain originating from the 1971 policy. The 1986 memo could not operate retrospectively to undo transactions that occurred while restrictions were lawfully lifted. The 2012 notification could not govern transactions that had taken place before its issuance.
Court’s Reasoning and Legal Principles Applied
The court laid out key legal propositions:
Prospective vs. Retrospective Operation:
The Court held that the 1986 memo did not explicitly provide for retrospective effect, and hence could not invalidate the transfers made during the 1971–1986 interregnum.
Accrued Rights Are Constitutionally Protected:
Once a transferee receives leasehold rights under a valid regime, those rights become vested and cannot be impaired by later policy changes unless clearly provided for by law.
Government Cannot Arbitrarily Undo Its Past Policy:
Relying on Supreme Court rulings, the Court underscored that executive action cannot destroy vested property rights—a principle central to both statutory interpretation and constitutional fairness.
Doctrine of Waiver and Novation:
The mutation granted in 2002 to Sanjoy Bhowmick, despite the 1986 memo, was treated by the Court as an implied waiver of restrictions and novation (a substituted agreement) recognizing the changed legal position.
Inapplicability of the 2012 Notification:
The 2012 policy was deemed irrelevant, as the transaction had already taken place in 2009.
Case Details
Case Title: Sri Suresh Bajaj and Anr. -Vs- The State of West Bengal and Ors.
Case No.: WPA 14151 of 2023
Date: 01.08.2025
Counsel For Petitioner: N.C Bihani, Sr. Adv.
Counsel For Respondent: Ayan Banerjee, Adv.
